General Liability vs. Workers Comp Insurance

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What to Know About General Liability?

As a business owner, you know that it is crucial for you to protect what keeps your business running. The main thing that you rely on is your employees. If they get hurt while on the job, you should have the proper protection in place to make sure they can seek the medical help they need, in the form of Workers Compensation insurance. Also, General Liability insurance is an essential policy to have to protect your business from lawsuits for third parties, usually customers, resulting from bodily injury, property damage, or advertising liabilities (libel, slander, defamation). Having both of these insurance policies to protect you and your business is vital.

What is General Liability Insurance?

General Liability insurance is the most common sense type of policy for business owners to purchase when they start their business. General Liability insurance protects the company from claims that arise out of the following:

  • Bodily injury - such as a customer coming to the business premises and slipping on a wet floor, tripping over a crack in the sidewalk, or being burned by hot food.
  • Property damage - an employee is distracted while working on a customer's home and damages another portion of it.
  • Advertising liability - an employee without thinking posts a social media post on your business page about a competitor that results in a defamation lawsuit. As you can see General Liability insurance is a crucial part of your insurance portfolio. Often states require this coverage, and if you happen to be a contractor who does work for any other contractor, they will most likely require that you carry it as well.

What is Workers Compensation Insurance?

Workers Compensation insurance, usually a legal requirement for businesses that have a certain amount of employees (varies by state), is coverage for employees that sustain injuries or illnesses while on the job.

  • Injuries/illnesses - will pay for medical expenses and recovery from a work-related injury.
  • Lost wages - if the employee is unable to continue working it will pay for those missed wages until they can get back to their job.
  • Funeral - if the unforeseen happens and an accident results in death, the policy will pay towards funeral expenses. The policy will also include dependent support payments (child support, alimony)
  • Liability expenses - if your business is sued due to a workplace injury or illness, Workers Compensation will pay for the legal fees.

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How Are The Two Different?

While both General Liability insurance and Workers Compensation are important, they do cover different things and protect different parties.

  1. General Liability is meant to cover your business in the event of a lawsuit and will cover legal fees, expenses, settlements, and judgments.
  2. Workers Comp is designed to cover your employees for work-related injuries, for medical expenses and missed wages, as well as death-related benefits. Keep in mind it will also cover lawsuit related expenses for workplace injuries as well, not General Liability.

Business Insurance

Running a business is challenging enough without having to worry about lawsuits, employee injuries or property damage. Having the right insurance gives you the peace of mind to focus on what matters - running your business.

The coverage you need depends on the type of business you run. A restaurant owner needs to be covered against customers possibly getting food poisoning while an accountant needs to be covered against calculation errors. CoverWallet's intelligent assessment system will identify the insurance you need based on your specific business, get you a policy that fits your budget, and do it all in less time than you think.

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