By Dean Clark, Licensed Insurance Broker
Reviewed by Dean Clark, Licensed Insurance Broker, on July 23, 2026
Originally published July 23, 2026 · Last updated July 23, 2026
What is the difference between general liability and workers comp?
General liability insurance covers claims from third parties — a client who trips over your cord, a kitchen flooded by a failed fitting — including legal defense costs. Workers compensation covers your own employees when they are injured on the job: medical treatment, lost wages, and rehabilitation. The policies never overlap; each responds to a claim the other excludes.
Which claims does general liability actually pay?
General liability responds to third-party bodily injury, third-party property damage, and completed-operations claims — problems with finished work discovered after you leave, like a leak behind a wall you closed months earlier. It also funds the legal defense, which frequently costs more than the underlying claim. It never covers your employees, your tools, or your vehicles.
Which claims does workers compensation pay?
Workers compensation pays an injured employee’s medical costs, a portion of lost wages, and rehabilitation, regardless of who caused the injury. In exchange, employees generally cannot sue the employer over workplace injuries — the coverage is the legal remedy. Nearly every state requires it once you have employees — most from the first hire — with penalties and stop-work orders for going without.
Do I need both policies?
If you have employees, yes — the law requires workers compensation and your contracts require general liability, and neither policy substitutes for the other. A solo operator with no employees can often carry general liability alone, though some states require workers compensation for certain contractor license classifications regardless of employees.
How are the two policies priced?
Differently, which is why quoting them together saves time. General liability is rated primarily on trade classification and revenue; workers compensation is rated on payroll by classification code and your claims history. One broker quoting both means one intake call — about 2 minutes for the basics — and coordinated effective dates with no coverage gap between policies.