I’m working with a Dallas area consulting firm which has experienced explosive growth over the past year in terms of both people and revenues. They are negotiating a lease for their first office space and will move out of the owner’s home in the coming months. It’s a very exciting time for them involving a lot of moving pieces, insurance being one of them.
I met with one of the partners last week to review their upcoming plans, timetable, and insurance needs. One of the things we discussed are the kinds of insurance needed. Based on the upcoming move, they need two types of liability coverage, general liability and professional liability.
Many companies require more than one type of liability insurance in order to fully protect them from different types of liability claims. In the case of the consulting firm I’m working with, they need both professional liability and general liability coverage. The professional liability provides protection in their consulting practice by giving advice which is inaccurate or harmful to the one of their clients. They also need general liability coverage to protect them in their upcoming office space from a premises liability claim, such as a client falling in consulting firm’s new office.
In the firm’s case, their professional liability coverage will not protect them in the event of a premises liability claim. Neither will their general liability insurance protect them from a liability claims brought by one of their consulting engagements. Having both types of coverage ensures full protection both during an engagement, as well as if something occurs in their office space.
There are a number of different types of businesses which require multiple liability policies including consulting firms, software and web development firms, architects, photographers, accounting and CPA firms, title companies, mortgage companies, real estate brokers, and a host of service oriented organizations. In each of these instances, the professional liability coverage protects them in what they do, while the general liability coverage protects them in their very own office space.
What triggers the need for different types of liability insurance can be many things. For the consulting firm, the need for office space influences the requirement for general liability coverage – their lease stipulates this. For other companies, it could be a different service offering, a new business entity, or even a new product.
What liability coverage do you need? Share what you have, as well as, your questions, comments, and experiences with us on our Google + and Facebook pages. I’d love to hear from you!