What’s the Difference Between General Liability and Workers’ Comp Insurance?

John Lightfoot | Feb 9, 2023 | minute read

What’s the Difference Between General Liability and Workers’ Comp Insurance?You have a duty as a small business owner to safeguard the individuals who contribute to the success ofyour company, your clients and your employees. They should count on you to be there for them if an accident or loss occurs.

General liability insurance and workers’ compensation insurance are two common ways that provide solutions to these issues. What distinguishes these two forms of protection, and what can you anticipate from each? Let’s look at the differences together.

General Liability Insurance

A type of business insurance called general liability insurance assists in defending your company against liability claims for the following:

  • Property damage to another person’s property
  • Bodily harm to customers who visit your business
  • Property damage or bodily injury to others as a result of your work
  • Medical payments for injured guests
  • Advertising liability that also covers trademark infringement
  • Personal injury that involves negligence or slander

General liability insurance will pay court costs, settlement and judgment fees, and attorney’s fees up to the policy’s limit for a covered claim. While generally not required, this insurance may be mandatory in certain industries, like construction. It may also be requested by your property owner, mortgage company, or even clients.

This coverage is frequently referred to as commercial liability insurance or business liability insurance. Be mindful that while this sort of insurance covers third-party claims, it does not shield your company’s assets from harm or provide compensation for injured employees.

What’s the Difference Between General Liability and Workers’ Comp Insurance?

You need commercial property insurance to be able to acquire coverage for your company’s assets. You should also consider professional liability if you have this exposure.

Free eBook: California Workers' Compensation Best Practices

Workers’ Compensation Insurance

Workers’ compensation insurance, in contrast to general liability insurance, is a state-mandated coverage that addresses the requirements of the employees when they sustain an injury at work. To cover medical costs, time loss and disabilities, for instance, you would file a worker’s compensation claim if an employee is injured while at work.

Your employees and their beneficiaries may submit a claim for the following under workers’ compensation coverage:

  • Assistance with covering medical costs associated with an illness or accident brought on by their employment.
  • If the damage results in a temporary or permanent disability, disability benefits may be available.
  • In the event that the employee needs time off work to recover, a portion of missed wages will be replaced.
  • If your employee dies in a work-related accident, death benefits are provided to compensate the dependents of the employee.

Does Your Business Need Both Liability and Workers’ Compensation Insurance?

It is crucial to have both general liability and workers’ compensation coverage since they defend you against distinct types of claims.

Final Thoughts

Although general liability and workers’ compensation have certain parallels, they also have some significant distinctions. Both policies cover bodily injury, with the difference being which injuries are covered by each coverage.

General liability protects your company from lawsuits brought by non-employees. Anyone employed by your business who suffers an accident while carrying out duties linked to their jobs is covered by workers’ compensation.

You need general liability and workers’ compensation in addition to other lines of coverage to run a successful business. To find out more about the kinds of coverage you need to safeguard your company, get in touch with us right away.

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Free eBook | Central CA Workers' Compensation Best Practices | The Dos and Don'ts of Workers' Comp - Workers' comp can be as complex as it is costly, especially out here. Read Central CA Workers' Compensation Best Practices, to learn best practices and tips specifically for local businesses. Download

Leap | Carpenter | Kemps Insurance Agency Can Help

Contact the experts at Leap Carpenter Kemps Insurance Agency. We’ve been in business for over seven decades and have licensed experts on hand to guide you on the best coverage for your organization. Call for a free quote today!

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About The Author

My insurance career spans more than two decades and includes extensive work in group captives and construction, working with general contractors and subcontractors all over the State.

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