The main differences between general liability and workers' comp coverage involve who is covered, what triggers a claim, and whether coverage is optional or legally required. Below you can review how both commercial insurance types differ.
General Liability vs. Workers' Comp Insurance
Updated: January 27, 2026
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What’s the Difference Between General Liability and Workers’ Compensation Insurance?
Core purpose | Covers third-party injury and property damage claims | Covers employee job-related injuries and illnesses |
Who is protected | Customers, clients, vendors, visitors, public | Employees |
Type of harm covered | Bodily injury, property damage, advertising injury | Medical costs, lost wages, rehab for employees |
Triggered by | Accidents involving third parties | Workplace injuries or occupational illness |
Covers employee injuries? | No | Yes |
Covers customer slip-and-fall? | Yes | No |
Pays medical bills? | For third parties | For employees |
Legal requirement | Often required by contracts, not usually by law | Required by state law in most cases |
Typical role | Third-party liability protection | Employee injury protection and wage replacement |
WHY GENERAL LIABILITY CONFUSED WITH WORKERS' COMP COVERAGE
Because both policies can pay medical costs and legal expenses after someone gets hurt, it is easy to assume one replaces the other, but they apply to completely different groups of people. The difference is who is injured. General liability covers injuries to customers, clients, and other third parties, while workers’ compensation covers job-related injuries to employees.
When General Liability and Workers' Comp Are The Same vs. When They’re Different
These coverages are often mentioned together because both deal with injury claims, but they apply to completely different groups of people.
They overlap in that both:
- Cover medical costs related to injuries
- Cover legal costs in certain situations
- Protect the business from financial impact after an injury
They are different because:
- General liability does not cover injuries to employees
- Workers’ comp does not cover injuries to customers or other third parties
- Workers’ comp is a no-fault system, while general liability usually involves negligence claims
- Workers’ comp is typically legally required while general liability is often contractually required
What General Liability and Workers' Comp Covers
To help you understand how both general liability insurance and workers' compensation insurance coverage terms differ, we broke them down in short below.
When the Differences Actually Affect Your Business
The distinction between general liability insurance matters most when:
- You have employees performing physical or on-site work
- State law requires workers’ compensation coverage
- You assume general liability covers employee injuries (it does not)
- Your workforce faces injury risk (construction, retail, manufacturing, etc.)
- You are evaluating compliance, not just liability protection
Without workers’ comp, employee injury costs typically fall directly on the employer.
General Liability vs. Workers' Comp: Bottom Line
The real distinction here isn’t between two similar policies, it’s between two different directions of risk. One applies when someone outside your business is harmed, and the other applies when someone who works for you is injured. These coverages are designed around who the injured person is and how responsibility flows from your operations.
Understanding that split is what helps you evaluate your coverage structure correctly, rather than comparing policies as if one replaces the other.
General Liability vs. Workers' Comp: Next Steps
Start by mapping how an injury connected to your business would most likely happen and who would be hurt. This helps determine whether your immediate focus should be on third-party liability protection, employee injury protection, or both.
From there, your path depends on where you are in the decision process:
If you’re trying to understand what coverage your business needs overall
Focus on identifying the types of injury exposure your business creates:
- Do customers, visitors, or the public interact with your operations?
- Do employees perform physical work or face job-related risk?
Most operating businesses have exposure in both directions, which is why general liability and workers’ compensation typically work together rather than as alternatives.
If you’re evaluating compliance or requirements
Separate legal obligations from liability protection strategy:
- Workers’ compensation is usually required by state law once you have employees
- General liability is often required by contracts, leases, or clients
This distinction helps you understand which coverage is mandatory versus risk-driven.
If you’re reviewing an existing insurance setup
Check for structural gaps rather than individual policies:
- Confirm that employee injuries would fall under workers’ compensation
- Confirm that injuries to non-employees would fall under general liability
The goal is making sure no injury scenario falls outside your protection.
If you’re early in the buying process
Start with the coverage tied to your immediate business structure:
- If you have employees → review workers’ compensation requirements first
- If your business interacts with customers or the public → review general liability needs
Then build outward from there.
If you’re unsure how your risk breaks down
Think through real-world scenarios:
- A customer slips in your store → third-party liability issue
- An employee gets injured on the job → workers’ comp issue
Matching situations to coverage types clarifies what belongs where.
About Angelique Palenzuela-Cruz
Angelique Palenzuela-Cruz is a Content Writer at MoneyGeek specializing in business insurance, with a primary focus on three core coverage types: general liability, workers’ compensation and professional liability insurance. She creates in-depth content that helps small business owners understand policy terms, coverage options and state-by-state considerations so they can make informed insurance decisions.
With five years of experience in personal finance journalism, Angelique has covered a wide range of insurance and lending topics, including mortgages, HELOCs, home equity loans, and personal insurance products such as auto, homeowners, health and pet insurance. Her research-driven approach is informed by her Bachelor of Arts in Psychology, which shapes how she presents complex financial information in clear, accessible language for everyday readers making coverage decisions.
At MoneyGeek, she is committed to ensuring her content meets rigorous accuracy and quality standards, with every article developed under editorial review to help business owners better understand their coverage options.