Did you know that workplace injury are so common, that in the United States, a worker is injured every 7 seconds while on the job? That equals about 540 work injuries every hour. With that in mind, we can assume workplace injuries are no rare occurrence.
Wanna take a guess at what usually covers these accidents? You might be thinking it’s general liability insurance. But actually, the type of injury sustained will determine who covers the accident.
Two main insurances cover accidents: general liability and workers comp insurance. In this article, we’ll discuss the difference between the two.
What Is Worker’s Comp Insurance?
The purpose of worker’s comp insurance has its foundation within the name itself. It is an insurance for workers whenever they are injured on the job.
The insurance usually pays for them to get medical treatment. The medical treatment they receive depends on what kind of injury they sustained, but typically this includes trips to the emergency room and doctor’s office. Worker’s comp insurance will cover any procedures done at those locations such as X-rays, possible surgeries, or even help pay for medication.
Worker’s comp insurance also pays a portion of the wages that the employee lost while out of work. Workers comp usually never pays fully for the lost wages, and the amount paid back depends on their salary. Generally, it’s about two-thirds of the employee’s pay.
Worker’s comp covers any type of injury or illness caused by the workplace. This means sicknesses, falls, or accidents.
What Is General Liability Insurance?
Quite the amount of confusion arises when general liability insurance is mentioned because of how similar it is to worker’s comp insurance. But while the two are strikingly similar in function, general liability has its own purpose.
General liability insurance protects you, your business, and visitors to your business from injury-related expenses. The thing to note here is that the injury can be caused to anyone on the work premises.
An example would be a customer tripping over a cord at your store and spraining their ankle. General liability insurance will cover the medical expenses that come as a result of this injury. If the customer chooses to file a lawsuit, general liability may also cover the costs for court and any other legal matters.
As a small business owner, this is an essential part of running your business. With general liability insurance, you’ll avoid having to pay out of pocket for these potential expenses medical costs. This will allow you to focus on other parts of funding your small business.
General liability insurance also covers some additional things for your small business. These include:
- Property damage was done against your business
- Accidental cases of copyright infringement on other businesses
- Defamation of another company that leads to a lawsuit
- Accidental property damage caused to your clientele
Notice how mostly everything with general liability deals between you (the business) and a third party. This leads us into the next section, in which we’ll discuss the differences between worker’s comp and general liability.
Differences Between General Liability and Workers Comp Insurance
If you’re wondering how general liability and workers comp insurance are different, this one is for you.
Reconsider how we mentioned that both general liability and worker’s comp insurance covers expenses related to injuries and the lawsuits that may come as a result of them. They’re very similar insurances, however, there is one striking difference.
That difference is noticeable when you take into account who the insurances are meant to cover. With general liability insurance, you and your business are the ones being covered. It’ll pay for any injuries (whether done to a person or your business) and cover the legal fees associated with them.
This means that general liability is business-centered. You are the one being shielded from lawsuit costs, court fees, and more. It’ll deal with most injury issues you have with third-party entities.
With worker’s comp, it is completely employee-centered. The insurance is there to protect your employees after they get injured. It’ll also make sure they have the necessary tools and capability to return to work.
With that in mind, general liability might also cover employee injuries. This depends on the plan you have, though.
Worker’s comp is not third-party focused, since they are a part of your business. In the event that an employee chooses to sue you over an injury they sustained while on the job, worker’s comp will cover that lawsuit and not a general liability.
Worker’s comp is also state-mandated and required in every state except Texas.
General liability may be state-mandated depending on the location and the size of your business.
Do I Need Both?
As a small business owner, it’s probably within your best bet to get both of these types of insurances. Ranging from a small dispute with another competing company to a customer getting seriously injured while at your location, general liability will cover both. While it’s not required in every state for every business, it’s just good practice to get it.
General liability insurance will save both you and your business from paying thousands of dollars in expenses.
Workers comp is also necessary for any small business (except Texas). It’s an integral part of keeping your employees safe. Worker’s comp works differently for every state, so make sure you check with local laws before opting into workers comp.
Some states require a minimum as low as two employees to be eligible for worker’s comp.
Finding the Right Coverage
If you’re searching for high-quality general liability and workers comp insurance policies at a reasonable price, then look no further. We here at National Workman’s Comp Solutions have all the right plans for your small business to get insured.
Our team has over 25 years of combined experience and is prepared to provide you with all the answers you need, 24/7. We provide you with access to the best insurance policies, whether your business is small or large.
If you’re ready to spend more time on your business and less on insurance, contact us today to get your free quote!