AWC Blog

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

general liability vs workers comp insuranceEverywhere you look, there’s some business expense that you can’t avoid. Insurance seems to take up the most time, money, and effort. Why can’t you just eliminate some of the policies you have? Don’t things like general liability and workers compensation cover you for the same issues?

Not exactly. While both general liability and workers compensation coverage share some similarities, there are very clear differences in each type of coverage. You need both for your business – for very good reasons.

How General Liability and Workers Compensation are Similar

The similarities between the two insurance coverages are simple. Both types of coverage will protect your business if and when you face a lawsuit. Between attorneys fees, fines and penalties, and any settlements that might be awarded, it’s a big similarity to consider.

However, general liability and workers compensation lawsuits don’t come from the same situations or people. Which is only one difference between the two types of coverage.

How General Liability and Workers Compensation are Different

Let’s look at the differences between these two very important types of insurance coverage.

Legal: Workers compensation coverage is a legal requirement of doing business in every state. Some businesses may be exempt but it is rare. General liability makes good business sense and is often required for certain types of jobs, such as working for a general contractor or obtaining government contract work, but it is not typically required by law.

Protection: Workers compensation protects you and your employees. General liability protects third parties, such as vendors, customers, and other people in contact with your business or on your business property.

Injuries: Workers compensation pays the medical costs, lost wages, and, if necessary, death benefits when an employee becomes ill, has an accident, or dies while on the job. General liability covers your business when a non-employee is injured on your business property, when you or an employee damage a non-employee’s property, and if your business is accused of slander, libel, or trademark infringements, known as advertising injuries.

Lawsuits: Both cover you in a lawsuit but in different ways. Workers compensation handles lawsuits by employees or their families due to illness, injury, or death. General liability coverage takes care of lawsuits that occur from third party accusations of damage or harm caused.

While workers compensation and general liability both serve to protect your business, the easiest way to think about the differences is simple. Workers compensation is for you and your employees. General liability is for any non-employee that deals with or comes in contact with you, your employees, or your business.

When it comes to running a business, anything can happen. Accidents are all too common. Having both general liability and workers compensation insurance covers you in multiple ways, keeping you and your business protected.

If you have questions about your current workers compensation policy or you’d like to get a new quote, contact us today. We can answer your questions and make sure you’re paying the best possible price.

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