Workers Compensation & General Liability Insurance: Difference & Similarity

Worker Compensation Insurance

When a worker or employee gets sick or injured due to the nature of the job, workmen compensation insurance provides coverage for it.

Workers compensation comes with several benefits such as permanent and partial disability, temporary disability or death. This policy provides coverage to the workers of mines, factories, plantations and construction sites.

There are several conditions that come with the compensation in this policy. Whatever compensation is paid to the employer will depend on the nature of the injury, age of the worker and average monthly salary paid to the worker. If the worker dies then the employer has to pay the compensation to the dependents of that worker.

General Liability Insurance

General liability insurance covers the common business risk. This insurance plan provides coverage to the business owner against the customer's property damage, and advertising injury with customer bodily injury. This insurance plan is for small business owners in case they have to protect their business from costs arising out of lawsuits.

Talking about customer injuries, for instance, if a customer visiting a timber shop and during the visit, a big piece of wood falls onto the customer’s head or leg and end up injuring the customer and the customer blames the business owner for the injury and sues him then the legal cost along with the medical expenses will be covered under this insurance policy.

Similarly, in the case of a customer’s property damage, general liability insurance will provide coverage for the replacement or repairing of that particular property.

Advertising injury refers to slander and libel. In case any competitor business owner does copyright infringement such as copying a slogan or advertising campaign and then the general liability insurance will provide coverage for it. It also provides coverage for defamation through libel and slander both.

Similarities between Workmen Compensation & General Liability

Both workmen compensation and general liability insurance policies deal with bodily injuries. Workmen compensation provides coverage to the employee in case he/she gets injured at the workplace during working hours. However, general liability provides coverage for medical expenses to the business owner, if any of the clients get injured during the visit to the insured owner’s property.

The second similarity is that if you are a construction contractor then any general contractor may require you to have general liability insurance or worker compensation insurance.

It is because general liability insurance will provide coverage for the lawsuit filed against you by a visitor for getting injured while visiting your property. However, if you have your own workmen compensation insurance then the general contractor will not have to cover you with their general liability policy.

Protect Your Business with Both Policies

It is suggested by the insurance industry experts to the business owner, you should purchase both insurance plans. As general liability insurance provides coverage to the insured against claims if the 3rd party gets injured at your location whereas the workmen compensation provides coverage to the workers in case they get injured during the work time. Also, there are some states where it is mandatory to have the workmen comp. plan.

Conclusion

Both general liability insurance and Workers Compensation are different yet similar to each other. Both the plans serve different purposes but are for business owners and contractors. Since both are interconnected, the contractors are suggested to have both policies in place to run a strong business.