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General Liability vs. Workers' Compensation Insurance

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General liability insurance and workers’ compensation insurance are two common insurance policies for many different types of businesses. Each helps protect you from financial losses from certain types of accidents that can occur while working.

While each business owner needs to assess what business insurance they may need, we can help them understand the differences and overlaps between coverage.

 

What is the difference between General Liability and Workers’ Compensation Insurance?

When comparing general liability insurance vs. workers’ compensation, it’s important to understand that while they both can help protect your business, there’s no actual overlap in what they cover.

General liability can help protect your business from financial losses if someone other than an employee accuses you of causing an injury or property damage. Workers’ compensation can provide financial support if one of your employees is injured or becomes sick as a result of their work.

These two types of insurance protect against distinct types of risks. Here’s a closer look at how these coverages differ.

1. Who is affected by an injury

Both general liability insurance and workers’ comp can cover medical expenses in the event of an injury. However, general liability only covers injuries to third parties, while workers’ comp only covers injuries to employees.

For example, if the fumes from a cleaning product make both a house cleaner and the client ill, you’ll need both general liability and workers’ compensation insurance to cover their medical expenses. General liability covers the client, while workers’ comp covers the employee.

2. The reason a lawsuit is filed

One important distinction between general liability insurance vs. workers’ comp is the types of lawsuits they cover.

Accusations of personal injury, like libel or slander, are covered by general liability. Workers’ comp insurance covers lawsuits related to liability for employee work-related injuries, illness or death.

3. Damage to property

Coverage for property damage is another key difference between workers’ comp and general liability. While there’s no coverage for this with workers’ compensation, general liability will cover damage to someone else’s property.

 

What is General Liability insurance?

General liability insurance covers some of the most common risks that almost every business is exposed to. It can provide financial protection if you are held responsible for injuries or property damages that affect a third party (meaning someone other than you or your employees).

General liability insurance also covers accusations of libel and slander.

What does General Liability insurance cover?

General liability insurance can cover specific types of accidents and unexpected situations, including:

Property damage: Accidental damage to someone else’s property.

Physical injury: Also called “bodily injury,” this refers to physical harm caused to a third party, such as a customer, client or passerby.

Personal injury: Also referred to as “advertising injury,” this can include claims related to advertising, such as copyright infringement, or damage to a party’s name or reputation, such as libel (written or visual defamation) and slander (verbal defamation).

Learn more about general liability insurance coverage.

Who needs General Liability insurance?

General liability insurance typically isn’t required by law. However, it protects against some of the basic risks most businesses face. Plus, clients may request proof of general liability insurance coverage before they’ll agree to work with you.

A few examples of businesses owners who can benefit from general liability coverage include:

  • In some states, general contractors must have general liability coverage to get a professional license.
  • Real estate agents may need a general liability insurance policy to earn a certification or license.
  • A landlord may require proof of general liability coverage before agreeing to rent commercial property for a retail store.

How much does General Liability insurance cost?

For some businesses, the cost of general liability insurance can be as low as $11 monthly. Several factors influence monthly premiums, such as the type of work you do and where your business is located.**

What NEXT customers typically pay for General Liability insurance

NEXT offers customized general liability insurance that’s tailored to your unique needs.

50% of our customers pay less than $25 to $45 per month on general liability insurance.**

What is Workers’ Compensation insurance?

Workers’ compensation insurance provides coverage when an employee gets hurt or experiences an illness as a result of their work.

It helps your business by protecting it financially when an accident occurs. And it can help your employees by covering approved injury-related costs, such as medical treatments, and lost income.

What does Workers’ Compensation insurance cover?

Workers’ comp insurance helps cover financial losses after a workplace injury. This type of insurance can help pay for:

  • Medical expenses such as ER visits, medical appointments and physical therapy
  • Lost wages to supply the employee with income while they recover
  • Retraining if the injury prevents them from returning to the same job
  • Permanent injury, which includes long-term benefits for lifelong impairments
  • Death benefits in the unfortunate event of a work-related death

Our workers’ compensation insurance at NEXT includes employers’ liability coverage. This provides protection if an employee files a lawsuit naming the employer’s actions (or failure to act) as a cause of their injury or illness.

Who needs Workers’ Compensation insurance?

In most states, businesses with employees must have workers’ compensation insurance.

Businesses that don’t comply with workers’ compensation laws can face fines or even felony charges.

Even if workers’ comp requirements don’t apply to your business, it’s a good idea to consider getting this insurance. Self-employed professionals, independent contractors and sole proprietors can also purchase this type of insurance to cover themselves with optional employer’s coverage.

How much does Workers’ Compensation insurance cost?

Workers’ compensation insurance costs can start as low as $12.20 monthly. The specific monthly premiums for each business are determined by how many employees you have, the type of work you do, your business location and other factors.***

50% of NEXT customers pay between $25 to $150 per month on workers’ comp insurance.

You can get workers’ compensation insurance quotes in minutes using our online instant quote process.

 

Do Workers’ Comp and General Liability insurance overlap?

There are similarities between the coverage that general liability and workers’ comp provide, but there is technically no overlap.

Both workers’ compensation and general liability insurance help protect businesses when an accident occurs or someone files a lawsuit against the business.

Like general liability insurance, workers’ compensation insurance may be requested by certain clients before they agree to sign a contract. Additionally, businesses may need proof of insurance to comply with license requirements or state law.

Many of the same factors are used when determining general liability and workers’ comp insurance costs, such as:

  • Type of business operations
  • Number of employees
  • Business location
  • Policy limits
  • Claims history

 

How NEXT helps small businesses get insurance

NEXT makes it possible to get cheap business insurance tailored to your unique business needs.

We provide affordable coverage for 1,300+ professions. In addition to workers’ comp and general liability, we offer several other types of business insurance, including professional liability insurance, commercial property, business owner’s policy, tools & equipment and product liability insurance.

You can easily get a quote, purchase and manage everything online and have a certificate of insurance for general liability and workers’ compensation ready for download instantly. The whole process only takes about 10 minutes.

Get your instant workers’ comp and general liability insurance quotes today.

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Let’s find the coverage you need for your business

Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.

General Liability insurance
General Liability

Protect yourself from accidents that cause physical injury or damaged property.

Professional Liability or Error and Omissions Insurance
Professional Liability/E&O

Shield yourself from lawsuits that claim your work errors caused financial losses.

Workers' Compensation Insurance
Workers’ Compensation

Cover medical bills and lost wages if your employees have an accident at work.

Commercial Auto Insurance
Commercial Auto

Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.

Tools & Equipment Insurance
Tools & Equipment

Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.

Commercial Property Insurance
Commercial Property

Keep your building, inventory and equipment protected from fire or water damage.

Business Owner’s Policy Insurance
Business Owner’s Policy

Combine general liability and commercial property into one policy to protect your business.

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* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
** The cost data presented here are based on NEXT active customers in the U.S. who purchased general liability insurance over the previous 12 months. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in July 2022.
*** The cost data presented here are based on NEXT active customers in the U.S. who purchased workers’ compensation insurance over the previous 12 months. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in July 2022.
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