According to the U.S. Bureau of Labor Statistics, there were 2.8 million nonfatal workplace injuries and illnesses reported by private industry employers in 2021.
Injuries not only impact the affected employees’ health and well-being but also pose a significant financial burden to businesses. It’s essential to understand the types of insurance available to protect your business from such costs.
Many employers may not know the extent of coverage provided by their general liability insurance policies. Particularly in regard to workplace injuries.
In this article, we’ll explore the ins and outs of general liability insurance and its coverage of workplace injuries. We’ll also be taking a look at how it complements workers’ compensation insurance.
Understanding the Basics of General Liability Insurance
General liability insurance is a type of insurance policy that provides coverage for businesses in the event of accidents that occur on their premises. This insurance is designed to protect businesses from financial loss from third-party legal claims.
Let’s take an example. A customer or client walks into your business and a piece of loose ceiling paneling falls down and hits them in the head. If that person decides to sue, your liability policy will help you pay for the costs of any legal battles or settlements.
In most cases, general liability insurance does not provide coverage for workplace injuries. It is designed to cover claims made against a business by a third party. This can include things like injuries sustained by customers or vendors on the business’s premises.
How General Liability Insurance Protects Employers and Employees
General liability insurance provides protection to both employers and employees in different ways. Let’s break this down a bit.
General liability insurance can provide financial protection from legal claims made by third parties who have been injured on their premises.
This can include claims for:
- Medical expenses
- Lost wages
- Other damages resulting from the injury
- Profit losses
- Equipment replacement
- Property damage
Without general liability insurance, a business may be responsible for paying these costs out of pocket. These costs can take a heavy financial toll.
General liability insurance does not typically provide coverage for workplace injuries. But if a third party is responsible for causing the injury, then general liability insurance may cover the resulting medical expenses and lost wages.
General liability insurance can also help protect employees from other types of workplace hazards.
Better Safe Than Sorry
Despite the fact that it doesn’t cover most workplace injuries, general liability insurance is still an important type of coverage for any business to have.
The costs of a lawsuit can be staggering. Don’t leave yourself open to potential financial ruin by refusing to get that extra bit of coverage.
Types of Workplace Injuries Covered by General Liability Insurance
General liability insurance may provide coverage for certain types of workplace injuries. Let’s take a look at some of these scenarios.
Slip and Fall Accidents
These are one of the most common types of injuries that occur on business premises.
Let’s say a customer slips and falls on the business premises. Your general liability insurance may provide coverage for any injuries sustained.
It’s important to take the details of any case straight to your insurance provider. They can then use this information to decide whether the incident is covered under your policy.
Product Liability Claims
If your business sells physical products to people, then this kind of injury will apply to you. Your business’s product could cause injury to a customer or user.
Not a situation any business owner wants to end up in. But it is always a possibility.
Your liability insurance policy can cover you for these types of claims. If you have to take your product off the market, then your insurance policy will be able to help you recoup any profits that you may lose from this.
Property Damage Claims
General liability insurance may provide coverage for damage to property caused by the business’s operations or products.
If your business is something like HVAC repair that involves carrying out work at other people’s homes, then there is a potential for your work to cause expensive damage to that property.
Your insurance policy should be able to help you cover the cost of repairing those damages.
Injuries Outside of Normal Duties
There is only one scenario in which an employee injury can be claimed on your general liability insurance. This is when the employee suffers an injury that occurs outside of the usual responsibilities of their job.
If a receptionist is asked to move some heavy boxes and they throw their back out in the process, then they can claim on your liability insurance.
Any other injuries suffered by employees while they’re at work will be covered by your workers’ comp policy. We’ll discuss this later.
How to File a General Liability Insurance Claim for Workplace Injuries
Making a claim against your general liability insurance should be done as soon as possible. There are four basic steps that should be taken to make a claim.
1. Report the Injury
The business should report the injury to the insurance company as soon as possible after it occurs.
The insurance company will likely require a detailed account of what happened. Document the incident and any injuries sustained in as much detail as you can recall.
2. Gather Information
The next thing that you should do is gather as much information about the incident as you can. Compile and organize any documents that you have that might be relevant to the complaint.
If your premises have CCTV, then review any potential footage of the incident. You should also try your best to take witness statements.
You want to give the insurance company as much information as you can so they can settle the claim as quickly as possible.
3. Cooperate with the Insurance Company
The least helpful thing you could do is to withhold information or be uncooperative with the insurance company. They are there to assess the claim and help you if they can.
There is nothing that you could gain by not being completely transparent and honest during the process.
Your liability insurance is there to cover your liability for any incident.
4. Consult with Legal Counsel
If the claim involves a significant injury or a dispute with the insurance company, then you may want to consult with legal counsel to help navigate the claims process.
It is important for you to carefully review your general liability insurance policy. Make sure that you fully understand the specific claims process.
Understanding Workers’ Compensation Insurance
Workers’ compensation insurance is a type of insurance that provides benefits to employees who are injured or become ill as a result of their job.
The purpose of workers’ compensation insurance is to ensure that employees receive adequate medical care and compensation for lost wages. It also protects employers from legal liability for workplace injuries.
Here are some key points to understand about workers’ compensation insurance:
Workers’ compensation insurance covers injuries or illnesses that are directly related to an employee’s job. You are covered regardless of who is at fault for the injury. This can include injuries from accidents, repetitive motion injuries, and illnesses caused by exposure to hazardous materials.
Workers’ compensation benefits can include medical expenses, lost wages, and disability payments. In some cases, benefits may also be available for vocational rehabilitation. In rare cases, death benefits for the employee’s dependents are also included.
Employers are required by law to provide workers’ compensation insurance to their employees. This includes providing information about the insurance and posting notices about the insurance in the workplace. You’ll also be required to report any workplace injuries or illnesses to the insurance company.
Employees who are injured on the job have the right to receive workers’ compensation benefits without fear of retaliation from their employer. In some cases, employees may also have the right to appeal a denial of benefits.
The cost of workers’ compensation insurance premiums is typically based on the level of risk associated with the job. The employer’s claims history will also be considered.
Employers may be able to reduce their premiums by implementing safety programs and other measures to reduce workplace injuries.
Key Differences Between General Liability and Workers’ Compensation Insurance
General liability insurance and workers’ compensation insurance are two types of insurance that are important for protecting businesses and employees. While both types of insurance cover workplace injuries, they differ in several key ways.
General liability insurance typically covers injuries that are caused by third parties or accidents that occur on the business premises. Workers’ compensation insurance, on the other hand, covers injuries or illnesses that are directly related to an employee’s job.
A welder being injured while working with faulty tools would be covered by workers’ comp insurance. A client slipping on a wet floor would be covered by your general liability insurance.
General liability insurance may cover injuries regardless of fault. Workers’ compensation insurance does not require the employee to prove fault on the part of the employer.
In fact, workers’ compensation insurance is designed to protect employers from legal liability for workplace injuries.
General liability insurance typically covers expenses related to legal defense and damages awarded in lawsuits.
Workers’ compensation insurance is there to provide benefits to employees who are injured on the job. This includes things like medical expenses, lost wages, and disability payments.
Employers are required by law to provide workers’ compensation insurance to their employees.
General liability insurance is not required by law. However, many businesses choose to carry general liability insurance to protect themselves from lawsuits and other legal claims.
The cost of general liability insurance premiums is typically based on the level of risk associated with the business.
The cost of workers’ compensation insurance premiums is based on the level of risk associated with the specific job.
Employers may be able to reduce their workers’ compensation insurance premiums by implementing safety programs and other measures to reduce workplace injuries.
The Importance of Workers’ Comp Insurance
Workers’ compensation insurance is a crucial component of any employer’s insurance policy. It helps protect employees and employers from financial damages that may arise as a result of any workplace injuries.
Without workers’ comp insurance, an injured employee may need to pay for medical expenses out of pocket or rely on disability benefits. Disability benefits do not always fully cover their losses. Employers may face lawsuits or fines for failing to provide adequate coverage for their employees.
Workers’ comp insurance can help mitigate the impact of workplace injuries on a company’s bottom line. It does this by providing benefits such as medical expenses, disability payments, and rehabilitation services.
This can help injured employees return to work faster and reduce lost productivity for the employer.
Legal Requirements for Workers Comp Coverage
In the United States, workers’ compensation insurance is typically required by law for most employers. Each state has its own laws and regulations regarding workers’ comp coverage.
Employers may be required to purchase workers’ comp insurance from a state-run program or from a private insurer. The amount of coverage required may also vary by state. Some factors that determine the amount of coverage needed include:
- Number of employees
- The type of work the company performs
- Level of risk involved in the work
- The company’s financial situation
- Ability to cover costs
- History of workplace injuries or claims in the company
- The cost of medical treatment and lost wages for injured employees in the company’s industry
- The company’s safety and risk management policies and practices
In addition to providing coverage for work-related injuries and illnesses, workers’ comp insurance can also protect employers from lawsuits related to workplace injuries. Employees covered under your workers’ comp policy will automatically have their right to sue you waived.
There are legal repercussions for not complying with your state’s workers’ comp laws. Be sure to fully read up on them to protect yourself from fines or other penalties.
The Financial Costs of Workplace Injuries for Businesses
Workplace injuries can have significant financial costs for businesses. These costs can include both direct and indirect costs associated with the injury.
Direct costs include:
- Medical expenses
- Lost wages
- Compensation payouts
- OSHA fines
- Other legal penalties
Indirect costs are things like:
- Decreased productivity
- Increased training costs
- Replaced equipment
- Lost contracts due to safety record
According to the Occupational Safety and Health Administration (OSHA), businesses spend an estimated $170 billion each year on costs associated with occupational injuries and illnesses.
Businesses can take steps to prevent workplace injuries and reduce these financial costs. This includes implementing safety measures and providing training to employees on how to avoid workplace hazards.
Overall, businesses should recognize the financial impact that workplace injuries can have and take proactive steps to prevent them. By investing in safety measures and insurance coverage, businesses can protect both their employees and their bottom line.
The Benefits of Workers’ Compensation Insurance for Businesses
Just because workers’ comp insurance is a legal requirement, doesn’t mean there aren’t a ton of benefits for having it in place. Let’s take a quick look at those.
Protection from Lawsuits
Lawsuits are incredibly costly for all parties involved. Most workers’ comp policies include a waiver on lawsuit action after an injury has occurred.
This means that an injured employee covered by your policy cannot pursue any further action against you beyond the insurance claim. This saves you a lot of money and stress.
Coverage for Medical Expenses
Serious injuries can rack up huge medical bills. Your workers’ comp insurance will allow your employee to meet these financial needs and get back to work as soon as they can.
Lost Wages Coverage
Being forced to take an extended period of time off work can put a huge financial strain on employees. Your workers’ comp insurance allows them to be free of this stress.
With their wages covered, the employee can just focus on getting back to full health. This stops them from rushing back to work and getting injured again.
Coming back to work too soon can also lead to a drop in productivity.
Improved Recruitment and Retention
Potential employees do not want to come and work for companies that aren’t going to have their safety in mind. Having strong workers’ comp coverage shows that you’re committed to employee safety.
This will help you retain your current employees as well as make recruitment much easier. Word spreads. If your company is not safe to work for, then prospective employees are going to steer well clear of it.
Access to Expertise and Resources
You don’t have to navigate the world of compliance and workplace safety alone. Insurance providers can give you access to a wealth of knowledge and resources that can help you better understand the risks associated with your industry and how to mitigate them.
The best defense against workplace injuries is to avoid them happening in the first place. Use the resources on offer to stay on top of modern safety practices and head off problems before they arise.
Impacts of Workplace Injuries on Employee Morale and Retention
Workplace injuries don’t just affect businesses financially. They also have an impact on employee morale and retention.
When employees are injured on the job, it can lead to a loss of productivity. There’s also the obvious effect of higher employee absences. Both of these things can significantly affect your bottom line.
Workplace injuries can cause emotional distress for the injured employee. This can quickly lead to a negative perception of the company.
Workers’ compensation insurance can provide financial support for injured employees. This can help alleviate some of the emotional and financial stress that comes with being injured on the job.
How Workers’ Compensation Insurance Complements General Liability Insurance
Workers’ compensation insurance and general liability insurance are complementary policies that work together to provide comprehensive protection for businesses.
In some cases, a workplace injury may result in both a workers’ compensation claim and a general liability claim.
Let’s say a customer visits a restaurant and slips on a wet floor. The restaurant has a general liability insurance policy that covers slip and fall accidents, so the injured customer files a claim with the restaurant’s insurer.
An employee comes out to mop up the puddle that the customer slipped in. In the process of mopping, the employee slips as well and injures their wrist. They can claim compensation for this second injury on your workers’ comp policy.
Having both workers’ compensation insurance and general liability insurance can help businesses minimize their financial risks and protect themselves against lawsuits resulting from workplace injuries.
When they work together, these two types of insurance combine to give a greater safety net to everyone involved in your business.
Get Workers’ Comp Insurance Today
While general liability insurance can offer some protection for workplace injuries, it is important to note its limitations and exclusions.
Businesses should also consider the benefits of workers’ compensation insurance. Workers’ comp provided more comprehensive coverage for employees who are injured or become ill as a result of their work.
Worker’s compensation insurance not only provides medical coverage and wage replacement benefits to employees, but it also helps protect employers from costly legal disputes and penalties.
Are you in need of a new workers’ comp policy? Get an instant quote with us today. Our team of insurance experts is waiting to get you covered and protected.