General Liability and Workers Comp Insurance Differences

You’re a small business owner, and you know how big of a role your employees play in your business's success. So if one, or more of them for that matter, get hurt on the job, which small business insurance policy should you rely on to help cover the costs of their medical expenses. Does your workers’ compensation insurance or does a general liability insurance policy cover it?

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What is General Liability Insurance

General Liability Insurance is a policy that safeguards your business against the high costs of certain unavoidable liabilities. It is important to note however that this type of policy does not cover employee injuries. Instead, general liability insurance covers third-party damages which include bodily injuries that a person sustains on your business’s property, damage you accidentally cause to someone’s property and injuries like slander, libel or trademark infringement.

If your business were to be sued over one of these incidents, General Liability Insurance covers lawyer’s fees, court costs and settlements or judgements. Because these claims can be the result of accidents or oversights any business can come across, many business owners like the piece of mind General Liability Insurance provides.

What is Workers’ Compensation Insurance

This is the policy you need when your employees suffer work injuries or illness. In fact, most states require employers to have this coverage if they have even one employee, but the laws vary from state to state and depend on your industry. This coverage helps your business pay for work-injured employees’ medical and recovery expenses, replacement wages, dependent support payments, and liability expenses when your business is sued over work injuries.

How are these types of insurance’s similar?

Both of these policies deal with bodily injuries. The difference, however, is the focus of protection is different. General Liability protects you when a client breaks an ankle on your property and sues for medical expenses. Workers’ comp is for when an employee gets hurt while working. Additionally, both policies may be required for construction professionals. If you work as a construction contractor, a general contractor may require you to carry your own General Liability and Workers’ Comp coverage. General Liability can cover lawsuits over your completed work if it injures a third party while having your own workers’ comp coverage means the general contractor won’t have to cover you with their policy.

General liability and workers’ comp may both be needed to run a business. One policy guards you from claims when third parties are injured on your property. The other helps businesses stay in line with state laws which can be tricky to find your way around. In most cases, business owners trust an experienced attorney, like Zea Proukou who is a workers’ compensation attorney in Rochester. Going this route eliminates any confusion and allows you to ensure you are protecting the business you worked so hard to build.

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About the Author

Paul Gilbert is a professional blogger, enthusiast who loves to write on several niches including Insurance, Personal Injury, workers’ compensation, and Social Security Disability. He is also a part-time consultant providing best solutions and support to injured workers for claiming workplace injury benefits under Workers' Compensation.