When you’re running a small business, you’ll find that there are lots of running costs and expenses you can’t ignore. Insurance costs tend to take a considerable chunk out your business account (not to mention the effort and time you spend trying to understand whether your business is adequately covered).
While both types of insurance share similarities, some clear-cut differences set them apart. Let’s start by looking at the similarities in how these policies protect your business and delve into the differences later.
Do You Need Workers’ Compensation Insurance AND General Liability Insurance?
Obtaining both types of policies is critical for any business, especially those who operate in the technical/industrial industries, such as contractors, sub-contractors, welders, electricians, and roofers. Both general liability insurance and workers’ compensation insurance protect your company against lawsuits. Considering the high cost of accidents related to your business (lawyer fees, fines, penalties, and any settlements awarded), it’s more cost-effective in the long run for your small business to pay for both types of insurance coverage.
What Do Workers’ Compensation Policies and General Liability Policies Cover?
Most states require all businesses to have workers compensation, with varying requirements. Some states, such as Texas, Florida, and others, allow employers to provide voluntary coverage. And still others, like Louisiana and Maine, have no provisions or requirements.
Purpose of Workers’ Compensation Insurance and General Liability Insurance
A workers’ compensation policy covers you and your staff. General liability policies protect your business from external parties, such as your clients, vendors, neighboring companies, or other businesses within your commercial premises.
Workers’ Compensation Coverage vs. General Liability Coverage for Injuries and Accidents
In the event of an employee’s work-related injury, illness, or death, workers’ compensation insurance covers medical expenses, lost income and death benefits. General liability insurance covers your company when a client gets hurt on your business’s premises, a non-employee’s property is damaged, or when your firm is accused of slander.
Legal Issues
Both a workers’ compensation insurance and general liability insurance help your company when you’re facing a lawsuit, but in different ways. Workers’ compensation coverage will help when your business is dealing with lawsuits from employees or their families that are due to injuries, illness or death. General insurance policies will help you to compensate injured third parties, such as clients or vendors.
Finding a Reputable Insurance Provider
Understanding what makes a general liability insurance agent reputable goes a long way toward protecting your company. Here are some helpful tips for finding a professional insurance provider. Experience. Most small business owners tend to approach a personal insurance agent when they’re looking for workers’ compensation insurance, forgetting that it takes someone with experience in that field to secure your business better. Additionally, their years of experience mean that they won’t let you miss out on any coverage that people in your line of business need to obtain. Long-Term Relationships. Carefully consider the long-term picture when you’re choosing an agent. Will they be there as your business grows? Imagine your company five years from now. Will you be dealing with the same products? Needing the same kind of coverage? Seeking answers to these questions enables you to design a sustainable insurance plan, which will ultimately lead you to the right provider. Adequate Coverage. Once you established an agent’s experience, ensure they can provide you with the type of general liability insurance and workers’ compensation insurance you need. Considering the uniqueness of your small business, you need someone experienced in working with small companies. Without a package that protects your business and employees, you may end up spending more than necessary.
