The important differences in general liability vs. workers’ comp insurance

Learn how to keep your business protected by choosing the right types of coverage

As a business owner, you have to make sure you’re equipped with the right insurance coverage to protect yourself from different types of liability, especially when it comes to accidents and employees getting hurt on the job.


Join us to explore two of the most common types of insurance coverage for these types of liabilities—general liability insurance and workers’ comp insurance—to determine the coverage your business needs.


What is general liability insurance?

General liability insurance protects your business from third-party claims when you cause personal, property, or advertising injury to a non-employee such as a client or customer.


For example, general liability insurance would protect your business in the event of: 


  • Libel or trademark infringement 
  • Bodily injury sustained by a client or customer at your office or storefront
  • Accidental damage to your client or customer’s property 


What is workers’ compensation insurance?

Workers’ compensation insurance protects your business by covering medical benefits and wage replacements for your employees in the event that they are injured on the job or become sick due to a work-related event. 


When your employees accept workers’ comp benefits, they also relinquish the right to sue you or your business in the event of an injury—providing additional protection to you as the employer. 


Workers’ comp covers the following as an example:


  • Medical bills and recovery expenses for employees that get injured on the job
  • Replacement wages for employees that can’t work after getting injured on the job
  • Dependent support payments and funeral expenses for fatal occupational injuries 


Related resource:

How does a workers’ comp claim affect me as the employer?


Is my business required to buy general liability insurance?

Employers are not mandated by law to purchase general liability insurance. However, it may be required by other entities such as licensing boards, lenders, clients, or landlords, depending on your unique business profile.  


For example, many general contractors require their subcontractors to have general liability insurance before working for them and certain landlords require renters to purchase general liability insurance as part of their rental agreement.


Is my business required to buy workers’ compensation insurance?

Employers in every U.S. state, except for Texas, are mandated by state law to purchase workers’ comp coverage for their business.


The details of workers’ comp coverage requirements often vary from state-to-state and industry-to-industry. For example, employers in Florida are required to purchase workers’ comp insurance, but specific employer coverage requirements are dependent upon the industry, number of employees, and entity organization. In the construction industry, for example, employers with one or more employees must have workers’ comp. [1]


How do I determine which types of coverage I should purchase for my business? 

First and foremost, you need to purchase workers’ comp coverage because it is legally required if you run a business in any U.S. state, besides Texas.


Even if you weren’t legally required to purchase workers’ comp insurance, it would still be beneficial to your business because if your employee is injured, you could be liable and it provides your employees with the benefits they need to assist in their recovery. 


Before choosing a workers’ comp policy, be sure to check the specific employer coverage requirements for your business to ensure comprehensive coverage. 


Although it’s not required by law, general liability insurance is considered a minimum coverage for most businesses, so you should consider purchasing it.


General liability insurance is especially beneficial for:


  • Small business owners
  • Businesses with employees who work off site or on customer property
  • Businesses that have their clients or customers visit their office/storefront


You should also consider buying other types of insurance for your business such as:


  • Employer practice liability insurance (EPLI)
  • Commercial auto insurance, especially if you or your employees drive for your business
  • Commercial insurance policy
  • Professional liability insurance
  • Commercial umbrella policy


It’s essential to consult with insurance professionals to determine the best combination of insurance policies for your unique business that will provide the right coverage for you and your employees. 


Ready to purchase insurance coverage for your business?

As a Certified Professional Employer Organization (CPEO) in Central Florida, our team at PER is able to assume the administration of the required workers’ comp policies for all of our clients. 


Our comprehensive workers’ compensation services includes: 


  • Master Insurance policy 
  • No deposit: Pay premium as wages are paid
  • Premium calculation and reporting
  • Claims management and loss control
  • Safety Training Guidance provided
  • OSHA record keeping with OSHA Logs provided to employers for compliance
  • Assistance with creating light duty work for injured employees


In addition to our workers’ comp and payroll administration services, our clients can choose to render a variety of additional convenience services from our team, including: employer practice liability insurance (EPLI) coverage, running background checks, benefits administration, and handling other employee-related issues. 


Ready to utilize the extensive capabilities of a full-service PEO? 

Contact us today to get started!


1: Florida Department of Financial Services | Workers’ Compensation Coverage Requirements

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