As a business owner, you need to have an insurance policy for your business. When it comes to insurance for your business, two main insurance policies stand out — General Liability Insurance and Workers Compensation Insurance. However, how would you know the kind of insurance your business needs? In this article, you will be reading about the difference between general liability insurance and workers compensation insurance policy. Let’s get started with it!
What Is A General Liability Insurance?
General liability insurance is an insurance cover that covers your customers if your customers suffer bodily injury in your business, damage to the customer’s property, copyright infringement, or even advertising injury.
What Is A Workers Compensation Insurance?
Worker compensation insurance is an insurance cover that covers your workers (employees) if they suffer injuries, and illness in the workplace. In many countries around the world, it is always necessary for every employer to have a worker compensation insurance policy on their business.
What Makes General Liability Insurance Different From Workers Compensation Insurance?
There are many key differences between general liability insurance and workers’ compensation insurance. Here are some of the key differences:
General Liability Covers The Customers
A general liability policy covers the customers of a business. Yes, if a customer experiences damage or injury to his body or property when you carry out your business endeavor, the general liability covers the customer. It allows you to prevent costs that may arise from treatment or legal battles that may occur.
Here are some instances where a general liability policy may come to the aid of your business:
1. In the event, that your customer slips and falls inside your business property. This calls for an insurance policy to take cause and the general liability insurance policy is all you need for that.
2. If you and your workers cause damage to a customer’s property. This is a typical case where a general liability insurance policy comes to your aid.
3. In the event where your business is dragged to court over an allegation. Your insurance company using the general liability insurance policy would help you cover legal costs that would arise.
4. If your business is being dragged to court over copyright issues, then the general liability would step in to cover that.
Those are some scenarios where your general liability insurance policy would help you mitigate costs that would arise.
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Workers Compensation Insurance Covers The Employees
Workers compensation insurance policy covers your employee in the business. If legal cases are filed against your business or when it comes to compensating your customers over bodily harm, then the workers compensation insurance policy would come to pay.
Let’s consider some scenarios to drive home the point on how workers’ compensation insurance covers employees:
If a worker who got injured at the workplace seeks financial assistance over hospital bills. Here, your worker’s compensation insurance policy would step in to provide that help.
2. In the event when an employee is not paid because he is still suffering from injuries that arose from the workplace. A workers’ compensation insurance policy covers paying him his salary or wages (as the case may be).
3. If an employee suffers death in the workplace. Worker compensation insurance under the death benefits should be visited to provide the needed compensation to the family of the deceased.
4. If an employee drags the employer to court over business affairs. The worker compensation insurance would then apply there.
It May Be Compulsory
In some countries around the world, a workers’ compensation insurance policy in a business is compulsory. It is stated in the law that negligence would not be applied when dealing with employees. However, in other countries, a general liability insurance policy would not be compulsory. It is usually solely the responsibility of the employer to decide whether or not he should make that cover on his business.
When Is General Liability Insurance Suitable?
General liability insurance is most suitable when you have the following in your business:
1. When you have customers who come into your workplace. To protect these, a general liability insurance policy is what you need to do.
2. When you have more than one property for your business. Since you may not be available in these locations, you would need to have a general liability insurance policy for your business.
3. When you promote your social media on social media, you should prepare to have general liability insurance cover over your business. This would help cover costs that may arise when you are dragged to court over copyright infringement, or something else.
When Is A Workers Compensation Insurance Suitable?
A workers compensation insurance is especially useful when you have:
1. When you have employees employed in your business. It doesn’t matter whether you own a small business or a large business, you need to have a workers’ compensation insurance policy over it.
Conclusion
This article has helped you know the difference between general liability insurance and workers’ compensation insurance policy. Now, you know what kind of insurance your business needs. So, feel free to go for the one suitable for your business to protect your business against risks.
