Contrary to common belief, insurance is not one-size-fits-all. You as an employer have to make many decisions to succeed, and finding the right insurance is one of them. You need to find the best policy to protect your property, products, and employees.
When faced with selecting the correct type of coverage for your business, you may have some questions regarding the need for both general liability and workers’ compensation policy and the difference between the two.
What is a Workers’ Compensation Insurance?
When one of your workers gets sick or sustains injuries while at work, the workers’ compensation insurance takes care of any medical bills other benefits the worker qualifies for.
The benefits may range from medical treatment and ongoing care to lost wages over death benefits if the employee loses their life due to a workplace injury. The death benefits include survivor benefits, which are a percentage of the deceased employee’s salary over a specific time, and a burial fee.
Most businesses must have workers’ compensation insurance.
What is a General Liability Insurance?
On the other hand, general liability insurance covers employees from damages or injuries accidentally caused by your business to third parties such as customers. It also provides coverage for different issues such as:
- Bodily injuries sustained from business operations such as customers getting injured on the business premises
- Property damage liability claims may result from damages to someone’s personal property, with the liability falling on your business.
- Advertising injury such as copyright violation or damaging someone’s reputation.
General liability insurance covers all expenses incurred through the legal defense, settlements, and court judgments if you have to face legal action due to any of the above problems.
Similarities Between Workers Compensation Insurance and General Liability Insurance
Both the workers’ compensation and general liability insurance provide coverage for bodily injuries. General liability insurance will protect your business when a customer gets painted on your business premises. In contrast, workers’ compensation insurance comes in when an employee gets injured while working.
Differences Between Workers Compensation Insurance and General Liability Insurance
One of the most significant differences between the two insurance covers is that the general liability insurance can cover both injuries and property damages to third parties from events occurring on your business premises. In contrast, the workers’ compensation insurance only covers injuries sustained by your employees while working.
Another key difference is that state laws require small businesses to have a workers’ compensation policy. The firm does not necessarily need to have general liability insurance. The requirements for companies to have workers’ compensation insurance vary from one state to another, so you need to verify with the workers’ compensation department in your state of residence before buying one.
Is your business in Phoenix facing a lawsuit involving workers’ compensation insurance or general liability insurance? Contact Phoenix Workers’ Compensation Attorneys for more information on how to navigate this landscape. We can also provide you with more information on the differences between the two and helped you understand which one applies to your case.