Insurance Comparison
Workers' Comp vs General Liability: What's the Difference?
Learn the fundamental differences between workers' compensation and general liability insurance and why tree service companies need both.
| Dimension | Workers' Compensation | General Liability |
|---|---|---|
| Who It Protects | Protects your employees when they are injured on the job. | Protects third parties (clients, bystanders, property owners) injured or damaged by your work. |
| What It Covers | Medical bills, lost wages, rehabilitation, and death benefits for injured employees. | Third-party bodily injury, property damage, personal injury, and advertising injury. |
| Legal Requirement | Mandatory in 49 states for employers with employees. Texas is the only exception for private employers. | Not legally required in most states, but contractually required by nearly all commercial clients and municipalities. |
| Average Monthly Cost | Approximately $186/month ($2,235/year) for tree services. | Approximately $138/month ($1,651/year) for tree services. |
| How Premiums Are Calculated | Based on payroll, NCCI class code (0106 for tree care), and your experience modification rate (EMR). | Based on revenue, operations type, claims history, and coverage limits selected. |
| Scenario: Employee Falls from Tree | Pays the employee's medical bills, lost wages during recovery, and any permanent disability benefits. | Does not apply — this is an employee injury, not a third-party claim. |
| Scenario: Limb Falls on Client's Car | Does not apply — no employee was injured. | Pays to repair or replace the client's vehicle and covers any resulting lawsuit. |
| Scenario: Chainsaw Laceration on the Job | Pays the employee's ER visit, surgery, rehabilitation, and lost wages. | Does not apply unless a third party (non-employee) was injured by the chainsaw. |
| Subcontractor Implications | If subcontractors lack their own WC, your policy may be charged for their payroll. Always verify sub COIs. | Your GL may need to extend coverage to subcontractor operations via additional insured endorsement. |
| Can You Operate Without It? | Operating without WC in states that require it exposes you to criminal penalties, fines, and personal liability for injuries. | You can legally operate without GL in most states, but you will lose virtually all commercial and municipal contracts. |
Who It Protects
Workers' Compensation
Protects your employees when they are injured on the job.
General Liability
Protects third parties (clients, bystanders, property owners) injured or damaged by your work.
What It Covers
Workers' Compensation
Medical bills, lost wages, rehabilitation, and death benefits for injured employees.
General Liability
Third-party bodily injury, property damage, personal injury, and advertising injury.
Legal Requirement
Workers' Compensation
Mandatory in 49 states for employers with employees. Texas is the only exception for private employers.
General Liability
Not legally required in most states, but contractually required by nearly all commercial clients and municipalities.
Average Monthly Cost
Workers' Compensation
Approximately $186/month ($2,235/year) for tree services.
General Liability
Approximately $138/month ($1,651/year) for tree services.
How Premiums Are Calculated
Workers' Compensation
Based on payroll, NCCI class code (0106 for tree care), and your experience modification rate (EMR).
General Liability
Based on revenue, operations type, claims history, and coverage limits selected.
Scenario: Employee Falls from Tree
Workers' Compensation
Pays the employee's medical bills, lost wages during recovery, and any permanent disability benefits.
General Liability
Does not apply — this is an employee injury, not a third-party claim.
Scenario: Limb Falls on Client's Car
Workers' Compensation
Does not apply — no employee was injured.
General Liability
Pays to repair or replace the client's vehicle and covers any resulting lawsuit.
Scenario: Chainsaw Laceration on the Job
Workers' Compensation
Pays the employee's ER visit, surgery, rehabilitation, and lost wages.
General Liability
Does not apply unless a third party (non-employee) was injured by the chainsaw.
Subcontractor Implications
Workers' Compensation
If subcontractors lack their own WC, your policy may be charged for their payroll. Always verify sub COIs.
General Liability
Your GL may need to extend coverage to subcontractor operations via additional insured endorsement.
Can You Operate Without It?
Workers' Compensation
Operating without WC in states that require it exposes you to criminal penalties, fines, and personal liability for injuries.
General Liability
You can legally operate without GL in most states, but you will lose virtually all commercial and municipal contracts.
What Tree Service Companies Need to Know
Workers' compensation and general liability are the two foundational insurance policies every tree service company must carry, yet they cover completely different risks. Confusing the two — or assuming one covers what the other does — can leave your business dangerously exposed.
Workers' compensation is employee-focused. When your climber falls from a tree and breaks a leg, workers' comp pays the medical bills, covers lost wages during recovery, and provides disability benefits if the injury is permanent. It also protects you from employee lawsuits — in exchange for guaranteed benefits, employees give up the right to sue you for workplace injuries (in most states). For tree services classified under NCCI code 0106, workers' comp rates are among the highest in any industry because of the extreme hazard level.
General liability is third-party-focused. When a branch your crew is cutting falls on a homeowner's fence, GL pays for the fence repair and any resulting lawsuit. When a bystander trips over your equipment at a job site, GL covers their medical bills and legal costs. GL does nothing for your own employees' injuries — that is exclusively the domain of workers' comp.
Tree service companies need both policies because they face both risks daily. Your employees are exposed to falls, chainsaw lacerations, electrocution, and struck-by hazards — all covered by workers' comp. Simultaneously, every job site presents risks to clients' property, neighboring structures, vehicles, and bystanders — all covered by general liability. Dropping either policy is not an option for a professionally run tree care operation.
Frequently Asked Questions
Can I get general liability without workers' comp?
You can purchase GL without WC, but if you have employees, operating without workers' comp is illegal in 49 states and can result in fines, criminal charges, and personal liability for injuries.
Does workers' comp cover me as the business owner?
In most states, sole proprietors and LLC members can exempt themselves from workers' comp. However, if you are injured on the job without WC, you will have no coverage for medical bills or lost income.
What is an experience modification rate (EMR)?
The EMR is a multiplier applied to your workers' comp premium based on your company's claims history compared to the industry average. An EMR below 1.0 means fewer claims than average (lower premium); above 1.0 means more claims (higher premium).
Do I need both policies if I am a solo operator with no employees?
You still need general liability for third-party protection. Workers' comp is typically not required for solo operators with no employees, but some states and clients may still require it.
What GL limits do most clients require for tree services?
Most commercial and municipal clients require a minimum of $1 million per occurrence and $2 million aggregate. Some large commercial contracts or utility companies require $5 million or more, typically achieved with an umbrella policy.
Does general liability cover damage to my own equipment?
No. General liability only covers damage to third-party property. Damage to your own equipment is covered by inland marine or equipment breakdown insurance.