Have you heard of employer’s liability and workers' compensation coverage? Both relate to workplace injuries, health issues, or fatalities, but they serve different purposes and protect different parties. If you’re a business owner, it’s important to understand the protection provided by employer’s liability insurance vs. workers’ compensation insurance.

To protect you properly, your insurance policies need to reflect the current state of your business. That fact won’t surprise most business owners or anyone who has insurance—business or personal. When what’s being insured changes, you (and your insurer) need to update your policy. That’s why it’s critical to stay in touch about your workers’ compensation coverage.

One of the most important types of insurance a small business can have is workers’ compensation (also called workers’ comp or workman’s comp). That’s because workers’ comp covers medical bills and lost wages for employees who are hurt in on-the-job accidents—and incidents can and do occur in any type of setting in every industry. Workers’ comp coverage benefits the employee, of course, but also the company since assisting employees with their healthcare expenses builds goodwill and helps the employee return to work sooner.

Workers’ compensation insurance is designed to cover medical costs and lost wages for employees who are injured or become ill on the job. If an employee dies as a result of a work injury, a workers’ compensation policy can pay a death benefit to their family.

Workers’ comp, formerly referred to as workman's comp, insurance helps your employees by covering costs associated with work-related injuries, illnesses, and fatalities. This includes medical expenses and lost wages. If a worker dies as a result of an on-the-job incident, this type of insurance can provide what’s called a death benefit to their surviving family members.

Why is the independent contractor vs. employee distinction important when it comes to workers’ compensation insurance? Worker classification matters is because with very few exceptions, employers are required to provide workers’ compensation coverage for their employees. Independent contractors are another story.

If you’re injured at work, probably one of the first things that comes to mind is, "Does health insurance cover work-related injuries?" While health insurance plans vary, typically, they don’t cover injuries that occur at work. However, the medical bills and other costs associated with on-the-job injuries and illnesses can be covered by a workers’ compensation policy.

Workers’ compensation insurance—also called workers’ comp insurance and workman’s comp insurance—is crucial coverage for every company that has employees. In most cases, it’s required by law.

Workers’ compensation insurance, also called workers’ comp or workman’s comp insurance, is very important for any company that has employees. In fact, it’s almost always required by the state.