General liability and workers' compensation insurance are probably not the first things that come to most people's minds when considering business insurance. In fact, very few people understand these two insurance terms. They may know that they're required by law in some states, but they may not be aware of their definitions. Understanding liability for your business is necessary if you want to protect yourself, your assets, and your employees. Without it, you could find yourself and your business at risk.
General liability and workers comp insurance
Workers' compensation insurance is designed to provide benefits to employees who are injured while at work. It also covers any injuries the employee causes to others while working. If an employee causes an accident, whether on his or her own or as a result of negligence on the part of another employee, then workers' compensation insurance takes care of the damage. For example, if an employee slips and falls on the job and suffers an injury, workers' compensation insurance pays medical expenses and pain and suffering, but doesn't actually pay the actual bill from the hospital or doctor. If the employee files a claim for pain and suffering, the company must pay the entire amount.
When an employee is injured on the job, they're considered "employed" and subject to laws governing employer liability. The general liability portion of workers' compensation coverage protects you from liability claims by employees, employers, and the state. General liability insurance doesn't cover actions by customers or vendors. For that, separate insurance is needed. Business owners should speak with a commercial insurance agent to find out which policy best suits their company and their specific needs.
Business owners should always keep their liability insurance and workers' compensation insurance up-to-date. By doing so, you'll be ready when an accident occurs. If you're without adequate coverage, you could be financially devastated by a lawsuit or claim. It never makes sense to put your business assets at risk for an accident you may be liable for.
There are ways to reduce your general liability insurance premiums. One way is to avoid accidents, which will increase your premiums. Another is to provide safer working conditions. If your business follows all local codes, increases safety measures for your employees, and follows a safe work environment policy, you may not have to pay the full amount of your liability insurance premium.
You may also want to consider purchasing an umbrella policy, which covers you and your business for multiple types of incidents. If an employee is injured on the property and makes a claim against you, your umbrella policy would cover the cost of that claim. Umbrella policies are often referred to as PPOs or preferred provider organizations. Although they're not tax deductibles, they can save your business a lot of money.
General liability and workers comp insurance
Workers' compensation insurance is designed to provide benefits to employees who are injured while at work. It also covers any injuries the employee causes to others while working. If an employee causes an accident, whether on his or her own or as a result of negligence on the part of another employee, then workers' compensation insurance takes care of the damage. For example, if an employee slips and falls on the job and suffers an injury, workers' compensation insurance pays medical expenses and pain and suffering, but doesn't actually pay the actual bill from the hospital or doctor. If the employee files a claim for pain and suffering, the company must pay the entire amount.
When an employee is injured on the job, they're considered "employed" and subject to laws governing employer liability. The general liability portion of workers' compensation coverage protects you from liability claims by employees, employers, and the state. General liability insurance doesn't cover actions by customers or vendors. For that, separate insurance is needed. Business owners should speak with a commercial insurance agent to find out which policy best suits their company and their specific needs.
Business owners should always keep their liability insurance and workers' compensation insurance up-to-date. By doing so, you'll be ready when an accident occurs. If you're without adequate coverage, you could be financially devastated by a lawsuit or claim. It never makes sense to put your business assets at risk for an accident you may be liable for.
There are ways to reduce your general liability insurance premiums. One way is to avoid accidents, which will increase your premiums. Another is to provide safer working conditions. If your business follows all local codes, increases safety measures for your employees, and follows a safe work environment policy, you may not have to pay the full amount of your liability insurance premium.
You may also want to consider purchasing an umbrella policy, which covers you and your business for multiple types of incidents. If an employee is injured on the property and makes a claim against you, your umbrella policy would cover the cost of that claim. Umbrella policies are often referred to as PPOs or preferred provider organizations. Although they're not tax deductibles, they can save your business a lot of money.
