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Executive Order for Policyholder Payments
Running a business comes with excitement, challenges, and a fair share of risks. Protecting your enterprise and your people is not just smart, it’s essential. Two of the most important insurance policies for any business are general liability insurance and workers’ compensation. But what’s the difference? When do you need each one? And how do they work together to keep your business safe? Let’s break it down in a way that’s both engaging and practical.
General liability insurance is your business’s shield against claims of bodily injury or property damage caused to others by your operations, products, or employees. Imagine a customer slips and falls in your store, or a product you sell causes property damage to a client’s home. General liability insurance steps in to cover medical expenses, legal fees, and settlements related to these incidents.
This coverage is not just about accidents, it can also help with claims related to libel, slander, or advertising mistakes. While general liability insurance isn’t always legally required, most landlords, vendors, and clients will expect you to have it before signing contracts or renting space. It’s especially important for businesses with frequent public interaction, like restaurants, retail stores, and contractors.
Workers’ compensation insurance is all about protecting your employees. If an employee gets hurt or becomes ill because of their job, workers’ comp covers their medical bills, rehabilitation costs, and a portion of their lost wages. It can also provide death benefits to the family if a workplace accident is fatal.
Unlike general liability insurance, workers’ comp is usually required by law if you have employees—even just one in many states. Each state has its own rules, so it’s important to check your local regulations. For example, you can find detailed requirements on the U.S. Department of Labor’s State Workers’ Compensation Officials website.
|
Feature |
General Liability Insurance |
Workers’ Compensation Insurance |
|
Who is Protected? |
Third parties (customers, vendors) |
Employees |
|
What is Covered? |
Injuries, property damage, lawsuits |
Work-related injuries, illnesses |
|
Legal Requirement? |
Usually not (but often expected) |
Usually required for employees |
|
Covers Legal Fees? |
Yes (from third-party claims) |
Yes (from employee claims) |
|
State Regulated? |
No |
Yes |
Most businesses benefit from having both general liability and workers’ compensation insurance. Here’s why:
General liability insurance protects you from the unexpected—like a customer suing you after an accident on your property.
Workers’ compensation insurance ensures your employees are taken care of if they’re injured at work, and it also protects you from employee lawsuits related to workplace injuries.
Having both policies means you’re covered no matter who gets hurt—your customers or your team.
Let’s look at two common situations:
General liability insurance covers the customer’s medical bills and any legal costs if they sue you.
Workers’ comp does not apply here, this is about third-party injury.
Workers’ comp pays for the employee’s medical treatment and lost wages.
General liability insurance does not cover this, it’s only for non-employees.
Myth: “My general liability insurance covers my employees if they get hurt.”
Fact: General liability only covers third parties, not employees.
Myth: “I don’t need workers’ comp if I only have a few employees.”
Fact: Most states require workers’ comp even if you have just one employee.
At Club Agency, we’ve been guiding businesses through the complexities of insurance since 19361. Our experts work with you to tailor the right mix of general liability insurance and workers’ compensation coverage, so you can focus on what you do best running your business.
We understand that every business is unique. Whether you’re a restaurant owner, a contractor, or a retail store, we’ll help you find policies that fit your needs and budget. Our team is always available to answer your questions and provide the mental safety you deserve.
Choosing the right insurance for your business can feel overwhelming, but understanding the difference between general liability insurance and workers’ compensation is a great first step. Both policies play a vital role in protecting your business, your employees, and your customers.
If you’re ready to explore your options or have questions about general liability insurance, contact us today at Club Agency. We’re here to help you navigate the insurance landscape and keep your business secure for years to come. You can also call us directly at (866) 784-9785.
By understanding and investing in both general liability insurance and workers’ compensation, you’re not just complying with the law, you’re building a safer, more resilient business. Club Agency is proud to be your trusted partner on this journey.
U.S. Department of Labor – State Workers’ Compensation Officials: State Workers’ Compensation Officials
Occupational Safety and Health Administration (OSHA): OSHA Workplace Safety
Small Business Administration (SBA) – Insurance Basics: SBA Insurance Guide
Here are some common questions that business owners ask about general liability insurance and workers’ compensation, with answers not directly covered in the blog:
General liability insurance typically does not covers cyber incidents. You’ll need a separate cyber liability policy for that.
Generally, workers’ compensation covers only employees, not independent contractors. However, some states have special rules for certain types of contractors.
Without general liability insurance, you could be personally responsible for paying legal fees, medical bills, and settlements out of pocket.
Some states have exemptions for certain types of businesses or employees, such as agricultural workers or domestic employees. Check your state’s regulations for details.
