General Liability vs. Workers’ Compensation Insurance: What’s the Difference?

The specifics of small-business policies depend on the industry and whether you have employees, among other factors.
Hillary CrawfordAug 20, 2021

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Many small businesses purchase both general liability and workers’ compensation insurance in case they ever face an event that could prompt an expensive lawsuit. The biggest difference between these types of is the types of accidents they cover.

protects a business against claims that its services, employees or advertisements caused personal injury or property damage, whereas helps cover medical expenses and lost wages should an employee get injured while working.

General liability insurance, also called commercial general liability insurance, deals with an array of accidents involving nonemployees and customers. Most policies include three main coverages labeled Coverage A, Coverage B and Coverage C.

Businesses need workers’ comp in case an employee experiences a work-related illness or injury. It’s required by law, though specific coverage requirements range from state to state.

General liability deals with accidents involving nonemployees and customers, whereas workers’ comp helps manage risk among employees on the job. Additionally, workers’ comp is required by law.

Here are some examples of what each type of insurance covers:

Most small businesses should consider a , which includes general liability insurance on top of commercial property insurance and .

As for workers’ comp, businesses should read their state’s website on workers’ comp requirements since they vary from state to state. However, small businesses will most likely need it if they have any employees who aren’t owners.

On a similar note...
Dive even deeper in Small Business