Business liability insurance vs. professional liability insurance vs. construction site liability insurance: how to navigate the options

Introduction

For an SME in French-speaking Switzerland, understanding liability insurance is a concrete lever for risk management. Civil liability (CL) is not a one-size-fits-all concept: depending on your business activity, your interactions with clients, or your involvement in construction projects, different coverages apply. In practice, a manager, CFO, or HR manager must be able to decide what is covered and what is not , and how to document and monitor these risks in their operational and financial decisions. This article helps you distinguish between business liability , professional liability , and construction liability , with methodological criteria to help you determine your needs.

Business liability insurance: basic coverage for common damages

Business liability insurance protects a company against third-party claims resulting from damages related to its daily operations.

Operational definition

Business liability insurance generally covers bodily injury and property damage caused to third parties by the company's activities (employees, property, rented premises, etc.); it also covers the resulting financial consequences.

When does it activate?

Typical examples:

• A customer slips and is injured on your premises.

• A delivered product damages a third party's property.

• An event organized by your company causes damage to a supplier.

In these cases, it is the company's liability insurance that serves as the first financial and legal safeguard.

What it does not cover

Business liability insurance is not designed to cover errors related to the provision of intellectual services or professional advice.

Professional liability insurance: risks related to expertise and service

Professional liability insurance is intended for intellectual or service provision where an error could cause financial harm to a client.

Distinction from company liability insurance

While business liability insurance targets physical or material damages, professional liability insurance covers pure financial losses resulting from errors, omissions or negligence in services provided.

Concrete examples

• A tax advisor makes a mistake in a tax return, resulting in a penalty for the client.

• An IT firm delivers software with a bug that paralyzes a business.

In these examples of service incidents, professional liability insurance intervenes to manage claims.

Market obligations and expectations

In Switzerland, although not always legally required , professional liability insurance is often required by clients or in tenders for regulated professions or specialized services.

Construction site liability insurance: specifics of construction projects

When your SME is involved in construction projects (whether as project owner, contractor or subcontractor), specific guarantees must be taken into account.

Integrated approach to construction

In Switzerland, a distinction is often made between:

• RC project owner , which covers the civil liability of the owner for damages caused to third parties on a construction site.

• Construction insurance / TRC (all risks construction site) which covers damage to the construction site itself (accidents, collapses, theft, etc.).

In the case of construction projects, these coverages go beyond the classic business liability insurance, because damages can come directly from site operations .

Construction site scenarios

• A passerby is injured when equipment accidentally falls on a construction site.

• A neighboring facade was damaged during excavation work.

For these situations, construction site liability insurance / project owner's liability insurance is the appropriate coverage.

Comparative table: coverage area

Blanket	Personal injury/property damage	Financial damages	Construction site	Professional service
Company liability insurance	Yes	No	No	No
Professional liability insurance	Yes (related third parties)	Yes	No	Yes
RC construction site / project owner	Yes	Sometimes according to contract	Yes	No, except for modules

Guidelines and checklist for deciding

Documenting your needs allows for effective management:

What needs to be documented:

• A precise description of the company's activities.

• List of integrated services and their potential risks.

• Identification of ongoing or planned construction sites or projects.

• Analysis of contractual obligations (clients / project owners).

• History of claims and associated costs.

• Recommended coverage level for each risk.

(Boxed text) Actionable list:

1. Do you offer services with a high intellectual or advisory content?

2. Do you have any construction projects in your portfolio?

3. What are the contractual financial and legal thresholds required by your clients?

4. Have you documented the specific exclusions in your current contracts?

Common mistakes and how to avoid them

Error: Confusing business liability insurance with professional liability insurance. Result: Inadequate coverage for service claims.

Solution: Clearly map your activities and use cases.

Error: Under-insurance on a construction site.

Solution: Include owner's liability insurance + TRC insurance before the start of construction, document plans/schedule/safety measures.

Mistake: Not reviewing contracts regularly.

Solution: Annual policy updates in line with your business developments.

Questions to ask your insurer/broker

1. What is the difference in scope between business liability insurance and professional liability insurance in our current policy?

2. Does professional liability insurance cover purely financial damages ?

3. What specific construction site insurance is required for our projects?

4. Are there any exclusions specifically related to intellectual services ?

5. What are the recommended coverage amounts depending on the type of risk?

6. How are defenses against unjustified claims handled?

7. What is the duration of post-construction coverage ?

8. Do we need a separate project owner's liability insurance policy ?

9. Does the police cover environmental risks related to a construction site?

10. What documents should I keep to facilitate the handling of a claim?

Conclusion

To effectively manage the risks of your SME in French-speaking Switzerland, distinguishing between general liability , professional liability , and construction site insurance is not optional but a methodological necessity. Each covers different areas: think in terms of physical damages vs. financial losses vs. construction site risks . Documenting your activities, claim scenarios, and contractual obligations will allow you to structure your insurance decisions and trade-offs. The next step is to commission a portfolio audit to validate your coverage and address any gaps with your broker.