Why it matters for your company
Workers' compensation pays benefits set by state law and usually bars the employee from suing. Employer's liability picks up what gets through: a spouse's claim, a suit alleging the employer's gross negligence, or a third party who pays an injured worker and then sues you for reimbursement.
Contracts often ask for employer's liability limits of $1M each accident, each employee and policy limit, and an umbrella frequently sits over it. When a customer's exhibit lists it separately from workers' compensation, it is the same policy with a limit to confirm.
Related terms
- Workers' compensationThe state-mandated policy that pays medical costs and lost wages for employees injured on the job, in exchange for limiting their right to sue. Most states require it once you have employees.
- Umbrella and excess liabilityBoth add limits above your primary liability policies. Excess follows the terms of one underlying policy, while an umbrella can sit over several and sometimes responds to claims the underlying forms leave out.
- Waiver of subrogationAn endorsement in which your insurer gives up its right to recover a paid claim from a party your contract names. Customers ask for it so your insurer cannot pay your loss and then sue them for it.
- Bodily injuryPhysical harm, sickness or disease to a person, including death that results. It is one of the two triggers of general liability, with property damage as the other.