Workers' Compensation vs Liability Insurance
Your employees are a critical part of your company’s success. When they are hurt while on the job, what protections should you have in place for your company and employee?
While a general liability policy offers necessary coverage for your business, it does not include protection for employee injuries. Here, you will learn what each policy is and how they work together to protect your business.
What Is Workers' Compensation?
Workers’ compensation provides benefits to employees who suffer injuries or illnesses while on the job. Workers’ compensation protects both you and your employee from financial loss. In most cases, employees can receive benefits regardless of who is at fault:
- Medical costs required to treat illnesses and injuries;
- Lost wages;
- Ongoing care, if required; and
- Death benefits and/or funeral costs if death occurs due to illness or injury.
Almost every U.S. state requires businesses to carry workers’ compensation insurance. Requirements vary by state, however:
- In Utah, all employers must carry coverage. Some exceptions exist, including agricultural employers, real estate brokers, partners, and sole proprietors.
- Arizona makes work comp insurance mandatory for businesses that regularly hire employees, with very few exceptions.
What Is Liability Insurance?
General liability insurance protects business owners from unavoidable liabilities. Instead of covering employee injuries, it provides protection against incidents involving third parties. For example, general liability covers:
- Injuries experienced by a person on your business’ property;
- Damage you may cause to someone else’s property;
- Trademark or copyright infringement;
- Slander, libel, or defamation; and
- Financial losses due to attorney fees, court costs, and settlements, in the event of a lawsuit due to a covered event.
How Are Workers' Compensation & Liability Insurance Alike?
Workers’ compensation and liability insurance are similar in their ability to protect your business from financial loss. Both policies cover injuries, yet the focus is different. Work comp covers employee injuries while general liability covers third-party (like customers’ or clients’) injuries.
Arizona and Utah require businesses to carry general liability insurance, just like workers’ compensation insurance. Working together, both policies help protect your business from a wide range of incidents.
Need a Workers' Compensation Carrier? Call Us Today.
American Liberty, a Utah and Arizona workers’ compensation carrier, specializes in offering innovative workers’ compensation coverage to employers. To learn more about how workers’ compensation can benefit your business, give us a call at 801-226-8008 or send us a message.