Workers’ comp and general liability both offer coverage when a person gets injured at their place of work. However, each one of them offers different benefits, and it’s always upon the employer to decide which one best suits their needs.
General liability insurance
General liability is designed to protect your business against particular unavoidable liabilities. Nonetheless, this policy doesn’t cover employee injuries. General liability ensures third-party damages that include the following:
- Body injuries that a person sustains while at your business premise
- Damages accidentally caused to your property
- Advertising injuries such as libel, slander or infringement of the trademark
What does general liability insurance cover?
If someone sues your business for any of the above incidents, then general insurance cover will cater for all the costs associated with it. Such costs include; attorney’s fees, settlements, and court costs.
The insurance company will pay for the settlement cost up to the policy limit.
Since the above claims can be as a result of an accident or even oversight encountered by any business, general liability insurance is categorized as an essential cover.
What is workers’ compensation liability?
Also referred to as workman’s comp, workers’ compensation liability insurance offers coverage when an employee gets injured while at work. Most states compel employers to have workers’ compensation insurance even if they have just one employee. Every state has its own laws when it comes to workers’ compensation. Most of those laws depend on the industry or where you stay.
Below are some of the benefits of a workers’ compensation liability insurance:
- Medical and recovery expenses for the injured employee
- The injured employee continues to receive a certain percentage of their salary in case they are unable to work because of the injury
- The insurance company takes care of all the legal expenses in case your business is sued
- Funeral expenses and support for the dependents in case of a deadly occupational injury.
- Offers retraining or new job replacement
If the business or a company doesn’t have any employee, then the owner can still take the workers’ compensation policy to cover themselves. Some sole proprietors often opt out of the compensation cover to reduce the monthly premiums.
Similarities between workers’ compensation and general liability insurance
Workers’ comp and general liability all deal with bodily injuries. For example, if a worker visits your business premises and breaks his or her leg – they will probably sue you for compensation. Instead of you paying for the legal expenses such as attorney’s fees, the general liability cover will take care of that.
On the other hand, a workers’ compensation policy will cover for the legal and settlement expenses in case your employee gets injured while working and files for injury claims.
Construction professionals are often required to have both workers’ compensation and general liability insurance.
If you work in the construction industry, then a general contractor might require that you get your own workers’ compensation cover as well as the general liability one.
This is because general liability insurance will be able to cover lawsuits on your completed work in case a third-party is injured. That means there will be no need for you to be included in the general contractors’ cover.
Besides that, some state laws demand that construction companies must have workers’ compensation cover irrespective of whether they have employees or not.
Difference between workers’ comp and general liability
Although the two insurance covers have various similarities, they also have significant differences. Let us take a look at some of them.
Workers’ compensation insurance is controlled by state laws
Besides commercial auto insurance, workers’ compensation is the other one that all employers are required to have by various state laws. Although the laws may vary, the regulations often depend on the number of employees your company or business has.
General liability is important irrespective of the size of your business
While workers’ compensation insurance is required from a certain number of employees, every small business should have general liability insurance even without employees. This is simply because you cannot tell when a customer will come and injure themselves at your business premises and file for injury claims.
In terms of coverage, workers’ compensation insurance is mainly focused on the injuries that occur at the workplace. On the other hand, general liability is a more generalized type of insurance that goes beyond just the injuries. General liability will often cover lawsuits that consist of advertising claims, libel, and copyright infringement.
Who should have a workers’ compensation cover?
Every state, through its laws, defines which type of business should have workers’ compensation insurance. Nonetheless, it is always good to buy the cover even if the law in your state doesn’t compel you to. You don’t know when your employee will suffer an injury and probably sue you for that.
Who should get a general liability cover?
General liability is a minimum coverage requirement for most business owners. It’s important for the following reasons:
- Allows visitors and clients to visit
- Good for clients and their property
- Covers employees who work offsite
Protect your business by having both workers compensation and general liability insurance
To be able to protect your business fully, it is important to have workers’ compensation as well as general liability. This is because both of them have their own distinct benefits when it comes to protecting you and your business.
In general, choosing the right insurance for your business can sometimes be challenging – particularly if you are looking for a specific type of liability cover.
There are a lot of things that sometimes make it hard to differentiate between general liability and professional liability. Besides that, there are also people who often confuse between contractual needs for auto liability.