Understanding General Liability and Workers Comp Insurance

## Overview of General Liability and Workers Comp Insurance General liability insurance protects businesses from claims related to bodily injury, property damage, and personal injury that occur on their premises or as a result of their operations. Workers compensation insurance, on the other hand, provides coverage for employees who are injured or become ill due to their job. For a detailed comparison of general liability and professional liability insurance, refer to our [core resource](https://www.cornerstone.com/answers/general-liability-vs-professional-liability-insurance). ## Key Differences in Coverage While both general liability and workers compensation insurance are essential for businesses, they cover different risks. General liability insurance addresses third-party claims, while workers compensation insurance focuses on employee-related incidents. Understanding these differences is crucial for ensuring adequate protection. ## Common Mistakes to Avoid One common mistake is assuming that general liability insurance covers employee injuries. This is not the case, as such injuries fall under workers compensation insurance. Another mistake is underestimating the necessary coverage amounts, which can lead to significant out-of-pocket costs in the event of a claim. ## Cost Considerations The costs for general liability and workers compensation insurance can vary widely based on factors like business size, industry, and location. General liability insurance typically ranges from $500 to $2,500 annually, while workers compensation insurance costs can range from $0.75 to $2.74 per $100 of payroll, depending on the state and industry. Always verify with local regulations for accurate figures. ## Importance of Both Policies Having both general liability and workers compensation insurance is vital for protecting your business and employees. These policies complement each other, ensuring comprehensive coverage against various risks. Businesses should regularly review their insurance needs to adapt to changes in operations or workforce size. ## Frequently asked questions ### What does general liability insurance cover? General liability insurance covers claims related to bodily injury, property damage, and personal injury that may occur on your business premises or as a result of your operations. ### What is the purpose of workers compensation insurance? Workers compensation insurance provides financial support to employees who are injured or become ill due to their work, covering medical expenses and lost wages. ### Do I need both general liability and workers comp insurance? Yes, having both types of insurance is important for comprehensive protection against various risks associated with running a business.