Does general liability insurance cover employee injuries?
No. Commercial general liability (CGL) insurance specifically excludes injuries to your own employees that arise out of their employment. Those injuries are covered by workers' compensation, which pays medical bills and lost wages, and by employer's liability coverage, which defends you if an employee or their family sues. General liability covers injuries to customers, visitors, and other third parties. See our guide to what liability insurance covers.
- The standard CGL form contains an Employer's Liability exclusion that removes bodily injury to your employees arising out of their employment.
- Workers' compensation (Part One) pays employee medical bills and wage replacement on a no-fault basis, and is mandatory for most employers in most states.
- Employer's liability (Part Two) covers lawsuits by employees, spouses, or third parties tied to a workplace injury. Common limits are $100,000 / $500,000 / $100,000.
- In monopolistic state-fund states (North Dakota, Ohio, Washington, Wyoming), employer's liability is not included. You need stop-gap coverage.
- Misclassifying workers as independent contractors is the most expensive gap: if a court says they were employees, neither CGL nor a missing workers' comp policy will pay.
Why General Liability Excludes Employee Injuries
Because workers' comp is designed to handle these injuries, the ISO CGL form excludes them. This is one of the standard exclusions every business owner should know.
The CGL employer's liability exclusion also removes claims by the injured employee's spouse, child, parent, or sibling, such as loss-of-consortium suits arising from the workplace injury.
Who Is Covered Where
• The employee's spouse sues you for loss of consortium: Employer's liability (Part Two of the workers' comp policy).
• A customer trips on a pallet in your aisle: General liability.
• A delivery driver from another company is injured on your loading dock: General liability, because they are not your employee. Their employer's workers' comp may also pay and then pursue you.
• A subcontractor's worker is injured on your job site and sues you: Often general liability, subject to contractor-specific exclusions in your policy.
• Your 'independent contractor' is injured and a court rules they were an employee: Neither policy may respond if you never bought workers' comp. This is the costliest gap.
State Rules You Need to Know
In the four monopolistic states (North Dakota, Ohio, Washington, and Wyoming), you must buy workers' comp from the state fund, which does not include employer's liability. Add stop-gap employer's liability coverage, usually by endorsement to your CGL policy.
Sole proprietors and partners are often exempt but can elect coverage for themselves. Business owners should also read does business insurance cover lawsuits for the full commercial picture.
Case Study: Carlos's Roofing Crew and the 1099 Problem
Scenario: Carlos ran a three-person roofing business, paid his crew on 1099s, and carried a $1M/$2M general liability policy but no workers' comp. A crew member fell from a ladder and suffered a broken pelvis, with $86,000 in medical bills and five months of lost wages.
Resolution & Judicial Outcome: Carlos's CGL insurer denied the claim under the employer's liability exclusion after the state found the worker was an employee based on Carlos's control over hours, tools, and methods. Carlos faced the medical bills, wage benefits, and state penalties for operating without required coverage. He settled with a payment plan totaling about $112,000 and bought workers' comp at a roofing class rate the following month.
What You Should Do: Step-by-Step Action Plan
Critical Mistakes to Avoid
- Assuming a general liability policy covers 'anyone injured at my business,' including staff.
- Paying workers on 1099s to avoid workers' comp when you control their schedule, tools, and methods.
- Hiring uninsured subcontractors. Many states make the general contractor responsible for their injured workers.
- Ignoring the employer's liability limit. $100,000 per employee may be thin for a serious injury lawsuit.