Workers’ Comp vs General Liability – What Your Business Needs
Not sure if you need workers’ compensation or general liability insurance? Learn the difference and why these coverages matter for your small business.
Introduction
When running a small business, protecting yourself from risk is just as important as managing operations. Two of the most essential policies are Workers’ Compensation Insurance and General Liability Insurance. But do you really need both? And what’s the difference? This guide explains when and why each type of insurance is necessary for your business.
What Is Workers’ Compensation Insurance?
Workers’ comp insurance covers medical expenses, lost wages, and rehabilitation for employees who get injured or fall ill while on the job. Most states legally require it once you hire your first employee.
You need workers’ comp if:
You have one or more employees (even part-time)
You work in a high-risk industry like construction or logistics
Your state mandates coverage regardless of business size
Failing to carry workers’ comp can result in steep fines, lawsuits, and even business shutdowns.
What Is General Liability Insurance?
General liability protects your business from third-party claims of bodily injury, property damage, and advertising injury. It covers incidents like customer slip-and-falls, accidental property damage, or legal costs from a lawsuit.
You should have general liability insurance if:
Clients visit your office or workspace
You perform services at client locations
You advertise your business online or in print
It’s often required for contracts, licenses, or vendor agreements.
Why You May Need Both
While these two policies cover different risks, most businesses benefit from having both. Workers’ comp protects your employees; general liability protects your business from external claims. Together, they provide a strong foundation of coverage.
At Loyal Tax Services, we help businesses secure affordable, compliant workers’ comp and general liability policies through trusted insurance partners.
Protect Your Business with Loyal Tax Services
Insurance requirements vary by state, industry, and company size. We’ll help you evaluate your business risks and connect you with the right providers to stay protected and compliant.
Not sure what coverage you need? Contact us today to get expert support and personalized insurance assistance.