On the other hand, professional negligence refers to mistakes made by a self-proclaimed professional or expert in which their acts or advice directly result in monetary loss of a client. This is most often seen in professions such as accounting and consulting. It is relevant to contractors too, however. If a mistake is made at any time during the architect or construction phase of a project, fixing or repairing the mistake can cost thousands or even millions.

Incidents such as these should be covered under a professional liability insurance policy. Professional liability insurance and general liability insurance are not the same, nor do they typically come together. While you may be able to add professional liability to your contractors insurance package, you may have to buy a separate policy.

You can also enhance both policies with umbrella liability insurance. Umbrella liability insurance steps in when your other liability coverages reach their limit. If your general liability policy covers $1 million and the company is sued for $1.6 million, this policy helps cover the remaining $600,000.