Charles Spinelli: Workers’ Comp and General Liability
Workers’ compensation insurance and general liability insurance are essential for small businesses. They can pay for a wide range of problems, including illnesses and injuries to your employees, injuries or property damage to customers, and other types of legal claims.
What Is Workers’ Compensation Insurance?
Workers’ compensation is a type of insurance that pays for an employee’s medical bills and lost wages if they become ill or injured because of their job. For instance, if your employee breaks a leg while performing a work-related task, workers’ compensation insurance will pay a certain portion of their lost wages and medical bills.
Workers’ comp also covers ongoing care, such as lost wages for disability, physical therapy, and death benefits if the employee dies due to illness or injury. Death benefits generally include a burial fee and survivor benefits, adds Charles Spinelli.
What Is Not Covered by Workers’ Comp?
Workers compensation insurance doesn’t typically cover:
• Commuting to and from work, but if they’re in a company vehicle or don’t have an office, they may be covered.
• Workers’ comp does not cover a fight in the workplace.
• Most states exclude workers’ comp coverage if intoxication or substance abuse contributed to the injury.
What Is General Liability Insurance?
General liability is a type of small business insurance that pays for injuries caused to others and accidental property damage. It also covers reputational harm, copyright infringement, and advertising injury. In addition, general liability insurance pays for legal costs, settlements, and judgments if you are sued or there is a claim such as reputational harm.
What Is Not Covered by General Liability Insurance?
Just like workers’ comp, general liability insurance doesn’t cover several types of problems that a company may face. Problems not covered by general liability insurance generally include:
• Business property damage
• Theft
• Employee injuries and illnesses
• Business-related errors
• Business-related car accidents
• Liability damages beyond your coverage limits
Which One Should You Have?
If you have any employees, most states will require you to have workers’ compensation insurance (even if it’s just one employee). You may also be required to carry general liability insurance depending on your business, state, and profession. For instance, some states require contractors to have it. General liability insurance may also be needed as a condition of your licensing, office lease, or contract.
Even if your state doesn’t require you to carry general liability insurance, it’s worth having, says Charles Spinelli. An expensive lawsuit for problems like injuries, reputational harm, or property damage could bankrupt your company. Without general liability insurance, you would have to spend your own money on these types of claims.
Charles Spinelli shares important information on workers’ compensation insurance, business lines of credit, and other related topics in his blogs. Read them on this page.