What are the main differences between professional liability (PL) and general liability (GL) insurance?
GL coverage is triggered by bodily injury or property damage. PL coverage is triggered by bodily injury, property damage or economic (consequential) damages. GL covers damages arising out of an a/e firm’s day-to-day operations, excluding professional services. PL covers damages arising from an a/e firm’s professional services. GL limits are not eroded by defense costs. Defense costs are outside the limits of liability and are unlimited. PL limits are, typically, eroded by defense costs. In other words, the liability limit covers both defense and indemnity payments. GL is typically written on an “occurrence basis”. PL is written on a “claims made basis”. GL allows Additional Insureds. PL does not allow Additional Insureds. GL may be scheduled under an Umbrella Liability Policy. PL cannot be scheduled under an Umbrella Liability Policy.
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