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Workers Compensation Insurance vs. Public Liability Insurance: What's the Difference?

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Insurance is one of the most important financial investments your business will make, as it ensures that when anything goes wrong, you have someone to help you out. The only problem can be deciding what type of insurance to get, especially if you are a new business. The two most common types of insurance you might hear about are workers compensation insurance and public liability insurance, and at first glance, they can look relatively similar. Both offer insurance for when injuries occur, and both are there to protect businesses and their employees should something bad happen. However, there are many differences that you need to know about too.

Legal Requirement

Workers compensation insurance is, in many instances, not just suggested but required by law for your business. This was set up to ensure that workers would always be protected if they are injured in their line of work, no matter the cause. It is also there to ensure that when workers have to take time off, they can get the medical coverage and help that they need. Public liability insurance, while very important and often recommended by virtually everyone, is not a legal requirement and is something you and your business have to decide on whether to invest in. 

The Scope

While similar in some ways, as mentioned above, there are a few crucial differences between workers compensation and public liability insurance. Public liability insurance covers third parties who are not connected to your business at all in case they or their property is injured. Workers compensation only refers to direct employees of your company. For instance, if while building a shed, some equipment falls over and injures a construction contractor, they would be covered under workers compensation. If that same shed fell onto the neighbouring property and hit someone random, they would only be covered by public liability insurance. 

Type Of Coverage

When it comes to workers comp, most of the coverage relates to how the insurance will pay out the money: for example, medical bills, physiotherapy sessions, sick leave and so on. Public liability insurance does not deal with the minute details of each individual cost like that, but rather payout lump-sum settlements and will also often cover legal costs that might eventuate out of a case like this. They are both important, but they are quite different in the type of monetary coverage they offer so it is important to recognise that. 

For more information, contact a company like Westralian Insurance.


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