General Liability vs. Workers' Comp: What's the Difference?

Two of the most important insurance policies for California contractors are general liability and workers' compensation. Many contractors confuse them — or think one covers everything. Here's the clear difference.

Workers' Compensation: Protects Your Employees

Workers' compensation insurance covers your employees if they're injured or become ill as a result of their work. It pays for:

• Medical treatment for work-related injuries
• Lost wages while the employee recovers
• Permanent disability benefits if applicable
• Death benefits for the employee's family

Workers' comp is required by California law if you have any employees. It does NOT cover injuries to third parties or damage to someone else's property.

General Liability: Protects Third Parties

General liability insurance covers claims made against your business by third parties — meaning people who are not your employees. It pays for:

• Bodily injury to a client, homeowner, or bystander
• Property damage you cause while working
• Completed operations (damage discovered after the job is done)
• Legal defense costs if you're sued

Do I Need Both?

In most cases, yes. If you have employees, California law requires workers' comp. And virtually every general contractor, property owner, and municipality will require proof of general liability before hiring you. Most contractors need both policies.

Can I Bundle Them?

Yes. We can often bundle general liability and workers' comp into a single program, which can be more cost-effective and easier to manage. Call us at (858) 925-9555 to discuss your options.