General Liability Vs. Workers’ Compensation Insurance

Commercial insurance, Risk management services, workers compensation

Every company or organization faces a certain amount of risk just for keeping for their doors open and running their business. Risk and hazards can only be mitigated or reduced, but never completely eliminated. There are multiple forms of coverage that every organization should have in place to protect itself from unnecessary amounts of risk.

Having any business with property and employees brings with it the inherent danger of workplace injuries from workers, customers, vendors, or just visitors to your property. General liability and workers’ compensation insurance policies are two of the most basic types of coverage every business should have, but the two are often confused with one another. In this blog, we will talk about their differences and discuss their advantages.

What Is General Liability Coverage?

Liability insurance like this protects your business from the possibly high costs of unavoidable injuries for non-employees. Business insurance of this nature covers injuries or illnesses that affect third-parties including:

  • Bodily injuries that someone might incur on your property
  • Damage you or your employees accidentally cause to someone else’s property
  • Advertising injuries like slander, libel, or trademark infringement

General business liability insurance will cover expenses like lawyer fees, court costs, and settlements. The amount of compensation they will pay out is limited by amounts stated in your policy. Claims like these can happen to almost any business despite whatever safety precautions they might take. That is one of the reasons this type of coverage is considered to be so essential.

What Is Workmans’ Comp Insurance?

Workers comp insurance is the type of policy you need to cover expenses from employees who have work-related injuries. Business owners need to know about this because many states will require businesses to have this type of coverage by law. However, the laws and penalties may differ depending on your location. Your organization should count on this type of coverage to pay for:

  • Medical expenses from work-related injuries
  • Replacement for lost wages
  • Death benefits like dependent and spousal support from fatal injuries or illnesses
  • Costs from when your business is sued by injured workers

How Are These Policies Alike?

  • Both policies cover bodily injuries, but in different ways.
    • Both types of coverage address bodily injuries or illnesses, but they both cover them in different ways. General liability covers your business when a client or vendor breaks their leg and sues for medical costs. Workers compensation insurance covers expenses when an employee breaks their leg and makes a claim for medical costs.
  • Some industries will legally be required to have both.
    • If you work as a construction contractor, some general contractors will make sure that you have coverage from both policies before they will work with you. This means they won’t have to you with their policy. Beyond that, some states even require construction workers will be forced to have Workers’ Comp even if they have no employees.

What Makes These Types Of Coverage Unique?

  • Workers’ Compensation is regulated by law.
    • In many states, this is the only insurance policy that employers are legally required to carry for their business. The regulations differ depending on your number of employees and whether they are considered part or full-time workers.
  • General Liability matters regardless of your business size.
    • Workers’ Compensation coverage requirement differ based on the size of your business and workforce, this is not true for General Liability. Whether you are a small business or large corporation, anyone could walk onto your property, trip over something, and break an ankle.

You Need Both Of Them For Comprehensive Protection

To operate as a strong and stable business, you need General Liability and Workers’ Comp to protect all of your interests. One policy safeguards you from third parties injured on your property. The other helps you maintain compliance with state regulations and enables you to pay for injuries to your employees.

To learn more about the different types of insurance that your company needs and our other risk management services, contact TCOR Management today.

2019-03-22T13:54:24-05:00