As your company hires employees, signs customer contracts, and works in more locations (offices, co-working spaces, and client sites), your exposure to risks increases. Two types of insurance quickly become essential: General Liability and Workers’ Compensation. They protect different people and respond to different types of harm, and most companies need both as soon as they have employees interacting with customers, vendors, or the public.

General Liability protects your business when your operations accidentally harm others. Workers’ Compensation protects your employees when work harms them. Together, they form the foundation of your company’s liability protections and are often required by landlords, enterprise clients, and state regulations. This guide explains how the two policies differ, where each applies, and why relying on one without the other can leave major gaps.

Key Takeaways: General Liability vs. Workers’ Compensation

• General Liability (GL) protects your business from third-party claims, including bodily injury, property damage, and advertising injury.
• Workers’ Compensation (WC) protects employees who are injured or become ill because of their job.
• General Liability is usually required by contracts, including leases and MSAs.
• Workers’ Compensation is required by law in almost every state once you hire employees.
• Neither policy replaces the other, and carrying both protects you from common operational and legal exposures.

General Liability vs. Workers’ Compensation: Quick Comparison

What General Liability Insurance Covers

General Liability (GL) protects your business if someone outside your company claims they were harmed by your operations. It pays for legal defense, settlements, and judgments tied to:

1. Bodily Injury to Non-Employees: If a visitor or customer is injured on your premises or because of your work, GL covers medical bills and any legal action. For example, a client slips on an uneven step in your office and fractures a wrist. GL pays for treatment and potential litigation.
2. Property Damage to Others: If your business accidentally damages someone else’s property, GL pays for repairs or replacement. For example, an employee drops a tool on a client’s glass desk during an installation and cracks the surface. GL covers the cost.
3. Personal and Advertising Injury: This includes libel, slander, or copyright infringement in your advertising. If a competitor claims your marketing misuses their trademark, GL pays for defense and may pay a settlement.
4. Products and Completed Operations Liability: If your product or completed work causes physical injury or property damage, GL responds. For example, a device malfunctions and starts a small electrical fire in a customer’s home. GL pays for the resulting damage.
5. Damage to Premises Rented to You: If you accidentally cause fire or water damage to a rented office space, GL covers repairs up to a specified limit.

Common Contractual Requirements

GL isn’t usually required by law, but it’s often required by:

• Commercial landlords
• Enterprise customers
• Event venues
• Vendors and partners

Most contracts require at least $1M per occurrence and often require that partners be added as additional insureds.

What Workers’ Compensation Covers

Workers’ Compensation (WC) protects employees who experience work-related injuries or illnesses. It provides medical care and wage replacement regardless of fault, and it protects employers from most employee injury lawsuits.

Since 49 out of 50 states require WC as soon as you hire employees, this coverage is rarely optional.

1. Medical Care for Work-Related Injuries or Illness: WC pays for emergency care, surgery, prescriptions, therapy, and ongoing treatment. For example, an employee sprains an ankle after tripping over a laptop cord in your office. WC covers all medical expenses.
2. Partial Wage Replacement During Recovery: If an employee can’t work while recovering, WC covers a portion of lost wages. For example, a worker injures their back while lifting a box and needs time to heal.
3. Rehabilitation and Return-to-Work Support: WC pays for physical therapy, occupational therapy, and job retraining if the employee can’t return to their previous role.
4. Death and Survivor Benefits: If a workplace accident is fatal, WC pays for funeral expenses and provides benefits to dependents.

Legal Requirements and Penalties

Penalties for not carrying WC can include:

• Civil fines
• Criminal charges (in some states)
• Stop-work orders
• Loss of legal protections if an employee sues

States take WC compliance seriously and enforce it aggressively.

Key Differences Between General Liability and Workers’ Compensation

General Liability and Workers’ Compensation might seem similar at first, since both relate to injuries and accidents, but they operate in totally different ways. One is designed to protect your business from the outside world, and the other protects your employees from harm that happens inside it. Before choosing coverage, it helps to understand the key distinctions.

Who Is Covered

• General Liability: Third parties such as visitors, customers, and vendors
• Workers’ Comp: Your employees

What Triggers a Claim

• General Liability: Harm to someone outside your organization
• Workers’ Comp: Employee injury or illness caused by work

Legal vs. Contractual Requirements

• General Liability: Driven by contracts like leases and MSAs
• Workers’ Comp: Driven by state law

How Lawsuits Work

• General Liability: Covers lawsuits from third parties
• Workers’ Comp: Generally prevents employees from suing employers

In short, General Liability protects your business from the outside world, and Workers’ Compensation protects the people inside it.

What General Liability and Workers’ Compensation Don’t Cover

Neither policy is complete on its own. Each leaves out important exposures that other coverages must address.

What General Liability Doesn’t Cover

General Liability focuses on third-party harm. It doesn’t cover:

1. Injuries to employees. Employee injuries always fall under Workers’ Compensation.
2. Damage to your own property. Business-owned equipment, inventory, and office contents require Business Property Insurance or a Business Owner’s Policy.
3. Professional service mistakes. Claims involving faulty work, bad advice, or missed deadlines fall under Errors & Omissions (E&O) Insurance.
4. Cyber or data incidents. Privacy breaches, ransomware, and data loss require Cyber Insurance.
5. Auto-related injuries or accidents. Driving-related incidents require Commercial Auto or Hired & Non-Owned Auto Insurance.
6. Employment practices disputes. Harassment, discrimination, and wrongful termination require Employment Practices Liability Insurance.
7. Claims against directors or officers. Board-level disputes require Directors & Officers (D&O) Insurance.

What Workers’ Compensation Doesn’t Cover

Workers’ Compensation focuses on statutory benefits. It doesn’t cover:

1. Lawsuits seeking damages beyond benefits. If an employee or their family believes the employer was negligent, Workers’ Comp doesn’t address those civil claims.
2. Claims from spouses or family members. Loss of consortium and similar suits require liability coverage.
3. Third-party over-action claims. If a third party is sued by an injured employee and then sues the employer, Workers’ Comp does not respond.
4. Dual-capacity claims. If a business is sued in another role, like product manufacturer or property owner, the claim falls outside Workers’ Comp.
5. Injuries to non-employees. Any injury to visitors, customers, or vendors is strictly a General Liability Insurance matter.
6. Workplace misconduct or employment-related claims. Wrongful termination, harassment, and discrimination require Employment Practices Liability Insurance (EPLI).

How General Liability and Workers’ Compensation Complement Each Other

Businesses rarely choose between GL and WC because they protect completely different exposures. Companies need both when they:

• Operate in any physical space where non-employees are present
• Employ staff, whether on-site, remote, or traveling
• Sign commercial leases or enterprise agreements
• Work with vendors, contractors, or customers face-to-face
• Expect to scale hiring, launch services, or handle foot traffic

A visitor’s broken ankle is a GL claim. An employee’s broken ankle is a WC claim. Neither policy covers the other scenario. Keeping both in place protects your business across internal and external interactions and ensures contract readiness and legal compliance.

Compare and learn more about other types of business insurance.

How to Choose the Right Mix of General Liability and Workers’ Compensation

Ask yourself:

1. Do you have employees? If yes, Workers’ Compensation is mandatory in almost every state.
2. Do visitors or clients interact with your business? If yes, General Liability is foundational.
3. What do your leases or MSAs require? Most require GL and may specify minimum limits or additional insured language.
4. What work environments do you operate in? Office-based operations still produce both GL and WC claims. Examples of slips, repetitive strain, and property damage appear across both source files.
5. Do you hire in multiple states? Multi-state operations must comply with varying WC rules, including monopolistic states. GL limits may also vary by customer expectations.

How Vouch Helps

Vouch helps growing companies secure the right combination of GL and Workers’ Compensation coverage by providing:

• Clear, expert explanations of how each policy applies to your operations
• Benchmarking based on companies similar to yours
• Support for multi-state Workers’ Comp requirements
• Fast certificates for landlords, enterprise clients, and vendors
• Advisors who understand the unique risk profiles of tech and SMB companies
• Guidance on complementary coverages to avoid gaps

You get a liability foundation built for how modern businesses operate, not a generic package.

How General Liability and Workers’ Compensation Work Together

General Liability and Workers’ Compensation do different jobs but work together to protect your business from two of its most common exposures: public-facing incidents and employee injuries. Carrying both ensures compliance, supports contract readiness, and reduces the financial impact of accidents that can disrupt growth. For most companies, these policies aren’t optional. They’re the starting point for operating with confidence.

Frequently Asked Questions

Is General Liability the same as Workers’ Compensation?

No. General Liability covers claims from third parties such as customers, visitors, and vendors. Workers’ Compensation covers employees who are injured or become ill because of their work.

Do I need both General Liability and Workers’ Compensation insurance?

Yes, if you have employees. Workers’ Compensation is required by state law in nearly every state, and General Liability is commonly required by commercial leases, enterprise clients, and vendor contracts.

Does General Liability cover injuries to my employees?

No. Injuries to your own employees are specifically excluded under General Liability, as documented in the GL guide. Those claims fall under Workers’ Compensation.

Does Workers’ Compensation cover injuries to customers or visitors?

No. Workers’ Compensation only applies to employees. Injuries to visitors, customers, or other non-employees are covered under General Liability.

Is Workers’ Compensation required if my employees work remotely?

In most states, yes. Remote employees are typically covered by Workers’ Compensation laws, and employers remain responsible for job-related injuries that occur in a home office environment.

What happens if I don’t carry Workers’ Compensation?

Penalties vary by state but can include civil fines, stop-work orders, and even criminal charges, according to the Workers’ Compensation guide. You may also lose legal protections and be exposed to employee lawsuits.

Do independent contractors need to be covered by Workers’ Compensation?

Usually no, but it depends on state classification tests. Some states may treat certain contractors as employees based on the nature of the work. When in doubt, review local rules or ask an advisor.

Does Workers’ Compensation cover injuries that happen during business travel?

Yes. Many travel-related injuries, like car accidents while driving to a client meeting, are generally covered if they occur during the course of work.

Can General Liability satisfy enterprise insurance requirements on its own?

Rarely. Many enterprise clients require both General Liability and coverage types that fill related gaps (such as Workers’ Compensation, E&O, or Cyber). GL alone does not meet most contract standards.

Vouch Specialty Insurance Services, LLC (CA License #6004944) is a licensed insurance producer in states where it conducts business. A complete list of state licenses is available at vouch.us/legal/licenses. Insurance products are underwritten by various insurance carriers, not by Vouch. This material is for informational purposes only and does not create a binding contract or alter policy terms. Coverage availability, terms, and conditions vary by state and are subject to underwriting review and approval.