Which statement best describes CGL's relationship to Workers' Compensation in a business with employees?

• A. Workers' Compensation provides the exclusive remedy for employee injuries; CGL covers third-party liability, but not workers' compensation claims.
• B. CGL covers employee injuries as the primary remedy; workers' comp covers only payroll.
• C. They provide identical coverage for employee claims.
• D. Workers' Compensation covers all injuries including employees and third parties.

Answer: (A)

Workers' compensation and CGL serve different purposes: workers' comp is a statutory, no-fault system that provides benefits to employees who are injured on the job, and in exchange the employee generally cannot sue the employer for those injuries. Because of that arrangement, workers' compensation is the exclusive remedy for employee injuries. The commercial general liability policy, meanwhile, covers liability to third parties—customers, visitors, or others outside the employee-employer relationship—for bodily injury or property damage caused by the insured's operations. It does not cover workers' compensation claims for employees. So, for on-the-job injuries, workers' comp handles the benefits, while CGL covers third-party claims arising from the business’s operations.