Question 1

What is the main difference between workers comp and general liability?

Accepted Answer

Workers comp covers injuries and illnesses that happen TO your employees as a result of their work. General liability covers injuries or damage that happen TO third parties (customers, visitors, the general public) as a result of your business activities. A customer who slips in your store is a GL claim. An employee who slips in your store is a workers comp claim. The injured party determines which policy responds.

Question 2

Do I need both workers comp and general liability?

Accepted Answer

In most cases, yes — if you have employees. Workers comp is legally required in most states once you have at least 1–5 employees (threshold varies by state). General liability is not legally mandated in most states but is required by most commercial leases, client contracts, and professional licensing boards. Even businesses without employees typically need GL — because customers, visitors, and the public still create liability exposure. Workers comp and GL cover completely different risks and work together, not as alternatives.

Question 3

Is workers comp or general liability more expensive?

Accepted Answer

Workers comp is almost always more expensive than general liability for businesses with employees, because it covers medical bills, lost wages, and rehabilitation for injured workers — which can run tens of thousands of dollars per claim. GL covers third-party claims, which are less frequent on average. A small construction company with 5 workers might pay $8,000–$20,000/year for workers comp but only $1,500–$4,000/year for GL. For solo operators with no employees, GL is their primary coverage and workers comp may not be required.

Question 4

Can an employee sue me if I have workers comp?

Accepted Answer

Workers comp is a no-fault system — in exchange for providing workers comp coverage, employers receive protection from most employee lawsuits for workplace injuries. In most states, an employee who is covered by workers comp cannot sue the employer for a workplace injury (with exceptions for intentional harm, gross negligence, or specific state laws). This workers comp "exclusive remedy" is one of its most valuable features for employers.

Question 5

What if I have contractors instead of employees?

Accepted Answer

1099 contractors and independent contractors are generally NOT covered by your workers comp policy — they are responsible for their own coverage. However, if a contractor is misclassified (legally should be an employee) or if your client contract requires WC coverage for all workers on a project, you may face audit exposure. Always verify that contractors you hire carry their own GL and workers comp — a Certificate of Insurance from each sub is the industry standard.

Coverage Feature	Workers Compensation	General Liability
Who it protects	Your employees	Third parties (customers, public)
Employee on-the-job injury	✅ Covered	❌ Not covered
Customer slip & fall at your business	❌ Not covered	✅ Covered
Property damage to client's property	❌ Not covered	✅ Covered
Medical bills for injured employee	✅ Covered (no-fault)	❌ Not covered
Lost wages for injured employee	✅ Covered	❌ Not covered
Advertising injury / defamation	❌ Not covered	✅ Covered
Legally required?	Yes (most states, 1+ employees)	No (but usually contractually required)
Typical annual cost	$800–$20,000+ (payroll-based)	$400–$2,500+ (revenue-based)

Industry	Class Code	Typical Rate per $100 Payroll	$300K payroll = WC Cost
Office / Clerical	8810	$0.15–$0.35	$450–$1,050
Retail Store	8017	$0.60–$1.20	$1,800–$3,600
Restaurant	9083	$1.50–$3.00	$4,500–$9,000
Landscaping	0042	$3.00–$6.00	$9,000–$18,000
Roofing	5551	$10.00–$25.00	$30,000–$75,000
Electrical	5190	$2.50–$6.00	$7,500–$18,000

Workers Comp vs. General Liability: What's the Difference?

Side-by-Side Comparison

Real-World Claim Scenarios

👷 Workers Comp Claims

🛡️ General Liability Claims

How Workers Comp Pricing Works

Bottom Line: You Need Both

Get Workers Comp + GL Together

Frequently Asked Questions