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    General Liability Insurance vs Workers Compensation Insurance

    In order to protect your business, investing in workers' compensation insurance along with general liability insurance is crucial to help cover costs. While workers comp coverage provides coverage for a work-related injury suffered by your employees, general liability covers the legal fees for claims against your business related to things like property damage.

    What Is the Difference Between Workers Compensation Insurance and General Liability?

    The main differences between workers' compensation and general liability are their area of coverage and their legal requirements.

    Firstly, workers' comp is legally required by state laws if you have at least one full-time or part-time employee. This can vary depending on where you live, although most regulations depend on the number of employees you have. If you hit the minimum requirement, you'll need to purchase this type of insurance to cover the cost of employee injuries.

    In contrast, you should strongly consider investing in a general liability insurance policy for your business even if you have no employees. A small business owner could suffer from property damage and expensive legal fees from accidents that occur on business premises, such as a slip or a fall. However, this type of business insurance isn't usually required by law.

    What Does Workers Compensation Insurance Cover?

    Workers' compensation insurance covers injuries that occur on your business property. On the other hand, if an employee gets sick outside of work, these benefits aren't available. Similarly, coverage is usually excluded for employees under the influence of alcohol or drugs or those who intentionally hurt themselves.

    Typical coverage includes medical expenses, missed wages, funeral costs, disability costs, and more.

    Medical Bills

    Hospital bills can quickly add up and cost a significant amount if your employee is injured on the job. Emergency room fees, surgeries, and prescriptions can be covered by this plan and prevent business owners from losing money.

    Missed Wages

    Some employees who suffer more serious injuries may need some time off work to rest and recover. Broken bones and burns are some common examples. Having coverage can help replace part or all of these lost wages so that your business doesn't have to suffer the burden.

    Physical Therapy and Disability Benefits

    In the aftermath of a severe accident, an employee may suffer a partial or permanent disability. This may require numerous treatments or physical therapy that can be costly. Insurance can cover this cost, along with disability benefits.

    Funeral Expenses

    In the event of a workplace-related death, insurance coverage can help provide death benefits to your employee's loved ones. It can cover the cost of a funeral service and other burial-related costs.

    Does Your Business Need Both Workers Compensation and General Liability Coverage?

    To cover all bases, businesses should purchase both insurance policies because they protect against a different set of liabilities. Although workers' compensation insurance is compulsory for many businesses, general liability insurance isn't. Despite this, smaller companies may not be able to cover legal fees on their own.

    How Do You Process Workers Comp Claims?

    The most important thing that a worker should do after they experience a work-related injury is to seek medical treatment. After this, the steps to file a claim include:

    • Filling in the details of the injury (e.g. date, time, and place) on the relevant form
    • Interviewing witnesses of the event and including this documentation
    • Sending the claims documentation to your insurance company along with relevant information
    • Provide the first report of injury form to your state’s workers’ compensation board if needed

    How Do You Choose the Right Workers Compensation Policy?

    New business owners may have a difficult time choosing the right insurance policy for their needs. Each state has different mandates and requirements, but here are some tips that can help you determine the optimal level of coverage.

    Read the fine print and do your research

    Not all insurance plans are made equal. There may be exclusions written in the fine print, including illicit drug use and criminal activity. Ideally, working with a reputable insurance company and broker can help you choose the right plan and find a company that processes claims more efficiently.

    Review your policy often

    As your business grows and hires more employees, you may experience changes that impact your coverage needs and premium. This means that you may be able to save money or obtain more coverage, so it's best to talk to your insurance agent or insurer to ensure that you're both up to date regarding your insurance policies.

    Create workplace safety measures

    In order to reduce the cost of an insurance policy for your business, prevention can be the key. A safety plan can prevent work-related injuries from occurring in the first place. Having clear signage, employee safety training, and safety gear can result in greater discounts in your state.

    Frequently Asked Questions

    How much do workers' compensation policies cost on average?

    On average, workers comp costs around $78 a month to ensure your employees. However, this number depends on the type of business, the size of your company, and your number of employees.

    How much does general liability insurance cost on average?

    The cost of general liability coverage for your business depends on your choice of policy and business size. Usually, small businesses pay around $40 per month for this type of policy.

    How do you apply for workers comp insurance?

    To obtain workers' compensation benefits, business owners can purchase an insurance plan directly from the insurance company, through a qualified agent, or a broker through a phone call or online. If you're not sure what you're looking for, working with a professional can help you decide what type of coverage you need.

    Is workers' compensation mandatory?

    It is a mandatory investment for most businesses, depending on the number of employees you have. Check your state laws to ensure that you are following the rules and regulations.

    At the end of the day, general liability insurance protects your business from expensive legal fees while workers compensation insurance protects your employees. Businesses of all shapes and sizes should consider purchasing more coverage than they need in order to provide a legal and financial safety net for future incidents.

    Learn more about small business insurance policies and why they are essential for your business with Assured Standard.

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    Assured Standard will protect your business with the right insurance, depending on your needs. Now more than ever, it’s crucial to have the right general liability insurance experts on your side. Protecting the future of your business starts today.
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