Workers’ Compensation vs Employers’ Liability Insurance: What’s the Difference?

Workers’ Comp vs Employers’ Liability at a Glance

What Is Employers’ Liability Insurance?

Employers’ liability insurance, also called contingent employers’ liability or employers liability coverage, is a type of commercial general liability insurance. It protects business owners from the cost of claims or lawsuits made by employees or their families over an employee’s work-related injury, illness, or death.

It isn’t legally required, but it’s highly recommended as part of your overall commercial insurance policy, because it steps in where workers’ comp doesn’t.

What Employers’ Liability Insurance Covers

Employers’ liability insurance can respond when:

• A worker isn’t covered by workers’ comp. That can happen if your industry isn’t on your province’s mandatory list, or if you’re under a worker threshold (Nova Scotia and New Brunswick generally don’t require registration until you have three or more workers).
• Student interns, apprentices or volunteers who get hurt on the job
• An employee claims your negligence caused their injury, illness or death, and the claim goes to court instead of through the workers’ comp system
• Family members sue on behalf of an employee who was seriously hurt or killed, where the law allows it

When a claim is covered, your policy is designed to pay for your legal defence plus any settlement or court award, up to your policy limit.

What it doesn’t cover: Employers’ liability insurance won’t cover claims or lawsuits about discrimination, harassment, or wrongful dismissal. That’s the job of employment practices liability insurance (EPLI), which is often sold as part of management liability insurance.

What Is Workers’ Compensation Insurance?

Workers’ compensation insurance, or workers’ comp, is mandatory, government-administered insurance provided by the Workplace Safety and Insurance Board (WISB) and regulated in the province or territory where you live or operate.

It is funded by mandatory employer premiums and designed to provide injured workers with wage-loss benefits, coverage for medical expenses and rehabilitation, and resources for employers to help prevent injuries from occurring at their places of business.  

Although there are a few exemptions, a business or employer cannot opt out of workers’ comp. There may be subtle differences between provinces, but in general, any small business with employees must register with the Workers’ Compensation Board (WCB) in its jurisdiction. 

What Workers’ Compensation Insurance Covers

Workers’ compensation insurance, or workers’ comp, is government-administered insurance run by a workers’ compensation board (WCB) or commission in each province. Ontario’s is the Workplace Safety and Insurance Board (WSIB), and B.C.’s is WorkSafeBC.

It’s funded by employer premiums based on your payroll and industry, and designed to provide injured workers with wage-loss benefits, coverage for medical expenses and rehabilitation, and resources to help employers prevent injuries in the first place.

Whether it’s mandatory for your business depends on your province, your industry, and sometimes how many workers you have. For most employers, it is.

What Does Workers’ Comp Cover?

Workers’ comp is no-fault insurance, meaning it covers work-related injuries and illnesses regardless of who caused them. It provides injured workers with:

• Medical and rehabilitation costs
• A portion of their lost income while they’re off work
• Benefits for their family if they die from a workplace injury or illness

Here’s the trade-off: workers covered by workers’ comp generally give up the right to sue their employer over a workplace injury. That’s called the statutory bar, and it’s a big reason registering protects employers too.

Who Needs to Register for Workers’ Comp? Rules by Province 

To find out whether your business has to register, visit the board for your province: 

• Alberta: If your industry requires coverage, open a WCB Alberta account within 15 days of your first worker’s start date. Full-time, part-time, temporary and casual workers all count, plus subcontractors who don’t have their own WCB account. 
• British Columbia: If you hire workers, you must register with WorkSafeBC. It recommends applying 30 days before you start your business or hire your first worker.
• Manitoba: Coverage is required if you employ workers in a mandatory industry, and most industries are. Contact the Workers’ Compensation Board of Manitoba before your first worker starts.
• New Brunswick: WorkSafeNB requires employers with three or more workers (25 or more in fishing) to register within 15 days of starting the business. Smaller employers can apply for voluntary coverage. 
• Newfoundland and Labrador: WorkplaceNL requires employers with full-time, part-time or casual employees, or who hire subcontractors, to register. 
• Nova Scotia: If you’re in a mandatory industry, register with the Workers’ Compensation Board of Nova Scotia within 10 days of hiring your third worker. Voluntary coverage is available for smaller employers.
• Ontario: Most employers must register with the Workplace Safety and Insurance Board (WSIB) within 10 days of hiring their first full- or part-time worker.
• Prince Edward Island (PEI): Employers with one or more workers must register with the Workers’ Compensation Board of PEI, then renew every year by February 28.
• Saskatchewan: Most industries are mandatory. Register with the Saskatchewan Workers’ Compensation Board within 30 days of starting work or hiring workers.

Miss your deadline and you could face retroactive premiums and penalties. In some provinces, such as New Brunswick, the board can also charge you the full cost of a claim from a worker injured before you registered. 

Do Self-Employed Professionals Need Workers’ Comp?

Usually not, if you work alone. In most provinces, business owners aren’t automatically covered by workers’ comp, even when their employees are. Many boards let sole proprietors, partners and independent operators buy optional personal coverage, so they get benefits if they’re hurt on the job. But check with your provincial workers’ comp board to be sure.

The big exception: in Ontario, construction business owners, including independent operators, generally must carry WSIB coverage.

And if you hire subcontractors, check that they’re registered. In provinces like Saskatchewan and New Brunswick, a subcontractor without their own coverage can be treated as your worker, and their premiums charged to you.

Do You Need Both Workers’ Comp and Employers’ Liability?

For most employers, yes. Workers’ comp handles on-the-job injuries for covered workers and blocks most lawsuits from them. Employers’ liability covers what falls through the cracks: workers your board doesn’t cover, volunteers and interns, and lawsuits that go to court instead of through the WCB.

Carrying both means you’re protected whether an employee injury claim goes through a WCB or ends up in court.

Frequently Asked Questions

Is employers’ liability insurance mandatory in Canada?

No. Employers’ liability insurance isn’t required by law in any province. Workers’ comp registration is the legal requirement for most employers. Employers’ liability is still worth considering, because it covers lawsuits that fall outside the workers’ comp system and can save your business from paying legal costs out of pocket.

If I have workers’ comp, do I still need employers’ liability insurance?

Often, yes. Workers’ comp protects covered workers and blocks most lawsuits from them. Employers’ liability insurance fills the gaps, like injuries to volunteers, interns or workers your provincial board doesn’t cover. It also pays your legal costs if an injury lawsuit goes to court.

Can an employee sue my business if I’m registered with the WCB?

Generally, no. Workers covered by workers’ comp give up the right to sue their employer over a workplace injury in exchange for no-fault benefits. That’s called the statutory bar. Lawsuits can still happen when a worker isn’t covered, and that’s where employers’ liability insurance helps.

Do self-employed professionals need workers’ comp in Canada?

Usually not if you have no workers, since business owners typically aren’t automatically covered. Most provincial boards offer optional personal coverage you can buy for yourself. There are exceptions, though. Ontario requires most construction business owners, including independent operators, to carry WSIB coverage. Check with your provincial workers’ comp board to be sure.

Does workers’ comp cover part-time workers and subcontractors?

Part-time workers, yes. Provincial boards count full-time, part-time and casual staff. Subcontractors are trickier. If they don’t have their own WCB account, many provinces treat them as your workers, which means you could be on the hook for their premiums.

What happens if I don’t register with my provincial WCB?

You may owe retroactive premiums plus late-registration penalties. In some provinces, such as New Brunswick, the board can also charge you the full cost of a claim from a worker injured before you registered. Registering on time is far cheaper.

How to Get Employers Liability Insurance in Minutes

Employers’ liability insurance may be included in a general liability insurance policy, or it can be added to one. Not sure if yours has it? Ask a Zensurance broker.

Zensurance helps protect 100,000+ Canadian small business owners and independent professionals with comprehensive, low-cost commercial insurance policies, including employers’ liability insurance.

With more than 50 insurance providers in our partner network, our friendly broker team can find and customize the policy you need.

Complete our online application in about three minutes to get a free quote.

– Updated October 21, 2026.

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