Is Workers’ Compensation Insurance the Same as Liability Insurance?

Workers’ compensation insuranceBusinesses have several options for protecting themselves against litigation, and insurance is a cost-effective way to minimize the damage of lawsuits. General liability insurance and workers’ compensation insurance have different purposes, and as a result, a business may need both.

Who Is Protected by Each Type of Insurance?

One of the key differences between general liability insurance and workers’ compensation insurance is who they protect.

General liability insurance covers expenses incurred when a bystander or customer is injured on business property. It may also pay for an employee’s injuries if the injuries occur as the result of a covered event.

In most cases, an employee’s injury or illness is not covered by general liability insurance. Workers’ compensation pays expenses that arise when an employee is hurt, whether or not the business is responsible for the injury.

What Insurance Pays Out

Each type of insurance policy covers different types of expenses. General liability insurance pays for the bodily injury of a customer or third party. It also pays for advertising injury, including libel and slander. A general liability policy pays for property damage inflicted on a third party by the business or its employees. It is also designed to cover the legal fees associated with certain lawsuits.

Workers’ compensation insurance covers specific expenses incurred by injured or ill employees. It pays for medical bills and lost income, but not pain and suffering. It also protects the business from lawsuits, since employees waive their right to sue in exchange for workers’ compensation.

Why a Business Needs Both Types of Coverage

It is crucial for business owners to protect themselves, their employees, and customers with proper insurance coverage. Workers’ compensation insurance is mandatory in Florida, with few exceptions, and failing to maintain necessary coverage can lead to fines and penalties. Coverage requirements vary between industries.

While general liability insurance is not mandatory in Florida or regulated on a statewide level, it does offer a number of benefits that make it a sound investment for small and large businesses. A single lawsuit by an injured customer or contractor can bankrupt a business, particularly if a company is required to pay the other party’s legal fees. General liability insurance also protects a business from a number of unforeseen legal issues, including libel, injuries caused by a defective product, advertising claims, and copyright or patent infringement.

While the cost of insurance can be substantial, business owners should consider what they stand to lose if a lawsuit is brought against their company. A company’s assets are at stake if a lawsuit is successful. Even if the business wins a lawsuit, legal fees can cut into profits. Insurance can protect businesses, their employees, and the general public.

Understanding Workers’ Compensation Benefits in Florida

If you’re unsure whether or not you’re entitled to workers’ compensation benefits after an injury, Scott J. Sternberg & Associates can analyze your case and help you take the next step. Reach out to our West Palm Beach office at 561-687-5660 to explore your legal options.

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