General liability vs. workers’ compensation: Understanding the differences
General liability insurance and workers’ compensation insurance are required for most businesses, and they can help protect your business if an injured party files a claim against you. But the circumstances of how and when they apply are fundamentally different.
Understanding how these two coverages work can help you avoid coverage gaps—keeping you compliant and protected—and support a strong, sustainable risk management strategy.
What general liability insurance covers
General liability insurance can help protect your business financially when someone outside your organization—such as a customer, vendor, or visitor—claims that your business caused bodily injury, property damage, or personal and advertising injury.
For example, if a customer trips on a loose floor mat in your store or a delivery driver damages a client’s property, your general liability insurance policy may help cover the third party’s medical bills, repairs, or legal expenses—instead of you being responsible for paying out-of-pocket.
It’s important to note that general liability insurance doesn’t apply to injuries or illnesses experienced by your employees. Workplace injuries fall under workers’ compensation coverage.
What workers’ compensation insurance covers
Workers’ compensation insurance provides benefits when one of your employees experiences a work-related injury or occupational illness. It typically helps cover medical expenses, a portion of lost wages, and—in some cases—rehabilitation and return-to-work support. These benefits help employees recover while reducing the financial strain on your business.
Do businesses need both general liability and workers’ comp.?
Yes, most employers are legally required to carry both types of coverage. Together, these coverages help you avoid unnecessary gaps, support a safer workplace, and reduce financial risk.
Be sure to work with your insurance provider to ensure your policy aligns with your specific risks, financial situation, and other factors unique to you.
At Sentry, we work with businesses of all sizes to tailor insurance solutions that fit your unique operations and exposures. If you’d like to discuss your workers’ compensation or general liability insurance requirements, feel free to contact us.
Related resources
Workers’ compensation insurance costs
Workers' compensation insurance is required in most states. Learn how much it costs and what contributes to that cost.
Excess workers' compensation
Excess workers’ compensation provides protection when claims exceed the retention level of your self-insured program.
Understanding workers' compensation settlements
This employer guide can help you learn more about workers’ compensation settlements, how the process works, and the employer’s role in resolving claims fairly.