What’s the Difference Between CGL and Professional Liability Insurance?

Business insurance can feel complex, especially when two essential policies sound like they might do the same thing. Commercial General Liability (CGL) and Professional Liability Insurance are both designed to protect your business from claims and lawsuits — but they cover different types of risks.

Knowing how they differ helps you avoid costly gaps in protection and ensures you are covered both for what you do and how you do it.

What CGL Insurance Covers

CGL protects against claims of bodily injury, property damage, and personal injury that happen to third parties during your business operations. It applies when something physical or external goes wrong.

For example:

A client slips on a wet floor in your office and breaks a wrist.
You damage a customer’s home while delivering services.
Someone sues you for libel based on your marketing materials.

CGL is about physical and reputational harm caused by your business’s presence or activity.

What Professional Liability Insurance Covers

Professional Liability Insurance, often called Errors and Omissions (E&O) coverage, protects you from claims that your advice, service, or expertise caused financial harm — even if there was no physical damage or injury.

It applies when:

A client believes your financial advice led to a loss.
A project you managed is delayed due to oversight and results in costs.
Your design or professional recommendation turns out to be flawed and causes problems.

This insurance is essential for service-based professionals, consultants, designers, and anyone providing specialized knowledge or strategic work.

Note: CGL covers physical consequences. Professional liability covers intellectual, advisory, or service-based mistakes.

Comparing CGL and Professional Liability

Coverage Area	CGL Insurance	Professional Liability Insurance
Covers bodily injury or property damage	Yes	No
Covers mistakes, errors, or omissions	No	Yes
Protects against advertising injury	Yes	No
Required by landlords or venues	Often	Rarely
Required by clients for services	Occasionally	Often for consultants and service providers

Caution: Many business owners carry only one type of coverage, believing it is enough. But if your work involves both physical operations and professional advice, you may need both to stay fully protected.

Do You Need One or Both?

If your business provides services, advice, or expertise, you likely need professional liability coverage. If you operate a space, work with the public, or handle physical products or deliveries, you also need CGL.

For example:

A marketing consultant needs CGL in case someone trips in their office, and professional liability in case a campaign leads to a client’s revenue loss.
A home renovation contractor needs CGL to cover physical site risks, and might also need professional liability if offering design or project planning advice.

Tip: Review your contracts. If they mention insurance requirements, they often specify which type and how much is needed.

CGL and Professional Liability Protect Different Parts of Your Business

One protects what you do physically. The other protects how you do your work. If your business interacts with people and also provides guidance, plans, or services, both forms of coverage can work together to form a full circle of protection.