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Do I need general liability insurance when my license only requires workers comp?

Just because your license only requires workers comp, that is not all of the insurance coverage your business needs.

Jerry Nicklow questioning why the state only wants workers comp insurance for his license?

Did you know that many businesses in Maryland are only required to have workers comp coverage in order to get a license.  We find crazy that the state would not require general liability insurance for licenses.

This may include assisted living facilities, bars and restaurants or daycare centers.   But this is not all you need to properly protect your business.    Don’t be fooled in believing that just because no other insurance is required for your license that there is no other coverage your business needs.

First, what does workers compensation insurance cover?  Well, workers compensation is meant to cover if an employee is injured on the job.

Secondly, what does workers compensation not cover?  It does not cover injury or damage to your customers or their belonging.  And it does not cover the building that you occupy.

Can you see how workers compensation is not all that you need for your business?

In addition to workers comp, general liability insurance is very important to your business

What if someone, other than an employee, is injured on your premises or damaged by your product or service?
You will need general liability insurance to cover the legal costs and injury claim.

Let us say, that a customer is on your premises and they slip and fall.  They break their leg and are out of work for the next 6 weeks.    Your workman’s compensation insurance policy is not going to provide coverage for your customer.

So, what happens if you only have workers comp and do not have general liability coverage? 

If you only have the state required workers comp insurance and no general liability insurance, you would end up paying this claim out of your pocket.   This would not be the most enjoyable way to handle the claim.

Now, that is say that the injured customer sues you not just for their medical bills and loss of earnings, but also for pain and suffering and mental anguish.  They are suing for $300,000 or more.  Not only may you be faced with paying his judgement, but in addition you have legal fees and court costs.    Can your business afford to pay this?   Most likely not.

So, before this happens to your business you need to get general liability coverage for your business. 

Do not assume that just because a specific coverage is not required for you to get your business license, that it means you do not need this coverage.    In addition, do not assume that just because the licensing agency is only looking for a certain amount of coverage that the limit is sufficient for you and your business.    Many times the license requirements are outdated.

Getting your business license is one of the hurdles that you need to overcome when starting your business.  But is not the only consideration that you need to make.

Other insurance coverage considerations would include:

Take the time to talk to an insurance professional about the insurance coverage that is available for you and your business.

Just because the state only requires workers comp insurance to gt a license does not mean that you do not need general liability and other forms of insurance to protect your business.

In addition, as your business changes and expands your coverage needs will likely change as well. You should re-evaluate your insurance at minimum annually.

Huff Insurance is a full service Trusted Choice Independent Insurance Agency.

Reach out to us at 410-647-1111 to go over your insurance protection plan today!

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