Workers' Compensation vs. General Liability Insurance
Workers' compensation and general liability serve different purposes and are usually both required in some form — workers' compensation covers your own employees' work-related injuries, while general liability covers third parties like customers or visitors.
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General Liability Insurance
Covers third-party claims of bodily injury or property damage — such as a customer or visitor being injured at your business — not injuries to your own employees.
- Covers customer and visitor injury claims that workers' compensation doesn't address
- Widely required by landlords and client contracts
- Doesn't cover an employee's work-related injury or illness
Workers' Compensation Insurance
Covers medical costs and lost wages for employees injured or made ill on the job, and is required by most states once a business has employees, with specific thresholds varying by state.
- Required in many states once you have employees, so it's often not optional
- Covers medical costs and partial lost wages for a work-related employee injury
- Doesn't cover customer or visitor injuries, which general liability addresses instead
- Premiums can be significant in higher-risk industries like construction
Which one makes sense for you?
These two coverages address different risks and most businesses with employees and any customer-facing presence need both — workers' compensation is often legally required once you have employees, in many states, while general liability protects against third-party claims that workers' compensation doesn't cover at all.
Key cost factors.
- Whether your business has employees, since that typically triggers a workers' compensation requirement
- Whether customers or visitors physically access your business location
- State-specific requirements and thresholds for mandatory workers' compensation coverage, which vary
- Industry risk level for both employee and customer injury claims
Before you decide.
- Does my state require workers' compensation at my current employee count?
- Do customers or visitors ever physically access my business location or job sites?
- What are typical workers' compensation premium rates for my specific industry?
Frequently asked questions.
Is workers' compensation required for a business with just one employee?
Requirements and thresholds vary significantly by state, with some states requiring coverage starting with the first employee and others setting a higher threshold, so checking your specific state's requirements is essential rather than assuming a one-size-fits-all rule.
All figures on this page are illustrative examples for general education, not quotes, appraisals, or guarantees of actual pricing. Actual costs vary by provider, location, project scope, and market conditions — always get a specific quote before making a purchasing decision.
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