Workers’ comp is not the same as Liability Insurance. However, these forms of commercial insurance cover different risks that your business might face in the future. Choosing the right coverage for your business is a must. Worker’s Compensation and Liability Insurance is not the same thing. Liability insurance covers the third party when damages have been done for which the policyholder is legally liable. While worker’s comp covers medical expenses and lost income as a benefit for the injured employee while in the course of his employment regardless of who’s at fault.
What is Workers’ Comp Insurance?
Worker’s compensation is a form of business insurance coverage that provides coverage for employees who suffer injuries in the course of their employment. Most states require business owners that have one or more employees to carry workers comp policy. Workers’ comp covers benefits such as medical expenses, lost wages while the injured employee is getting his full recovery. This policy will apply as long as the accident happens in the course of his employment and regardless of who’s at fault.
How does Workers’ Comp Claims Work?
Does Small Business Need Workers’ Comp Insurance?
Workers’ compensation insurance is the top way for small businesses to protect their employees in certain accidents. As a business owner or an employer, you have a legal obligation to provide a safe workplace for your employees. However, accidents may happen even if you are in the safest place. California State law requires business owners that have at least one or more employees to carry workers’ comp insurance. Failure to comply to carry workers’ comp insurance may lead employers to criminal prosecution, fines, and expensive litigation.
1. Uninsured Employer
2. You Must Be an Employee
3. Injury or Illness Must Be Work-Related
4. Reporting and Filing Deadlines
What to do after reporting the incident?
1. Go to an approved health professional
2. Claim Process
3. File the Claim
What is General Liability Insurance?
General liability is a form of commercial insurance coverage that secures your business against certain liability claims. Typically, this form of policy covers your company from claims such as bodily injuries and property damage due to your products, operations or services. On the other hand, this coverage does not provide coverage for employees who suffer injuries. Furthermore, General liability covers third-party which is non-employee damages.
What does General Liability Insurance Cover for Business?
- Covers the cost of property damage claims against your business
- Medical cost in the event accident occurs and someone suffers an injury at your company
- Advertising injury claims to your business
- Lawsuit costs, settlements, and judgments for covered claims
General Liability Insurance typically does not cover:
- Damages to your business property
- Personal injuries claims caused by your own employees
- Malicious or illegal acts that are done on purpose
- Vehicle accidents that you or your employee is involved using the personally owned vehicle while used for work.
- Injury and illness of employees happened in the course of employment.
The risk you may face of not having
General Liability Insurance
- Generally, you will need a legal counsel, that can cost $100 to $200 for just an hour.
- Costs can easily go higher for about $75,000 if the claim ends up in court.
- You’ll need to spend thousands of dollars, even if it doesn’t go to court.
- Fortunately, the right General Liability Insurance policy could help cover most of these costs. Example Damages:
- Bodily injuries that an individual may suffer from your business operation.
- Accidents that may cause damages to other property while conducting your business.
- Advertising injuries (Libel or trademark infringement).
In the event that your business is sued in any incident mentioned above, general liability covers attorney’s fees, court expenses, and settlements up to the policy limit. By not having general liability for small businesses you may end up in bankruptcy, considering the large enterprises in paying lawsuits expenses from their own pocket.
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