Workers comp employers liability limits are the three Part Two amounts on your policy: one for each accident, and two for disease, per employee and for the whole policy. Part One pays benefits required by state law and is the only part called statutory. Part Two pays to the limits shown, so a limit a contract demands is a contract term, not a legal minimum. Umbrella sits over Part Two only if its schedule lists it.
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A workers comp policy does two separate jobs. Part One pays the benefits the state's workers comp law requires of you, and the standard form states no dollar limit for them. That is why those benefits, and only those, are described as statutory. Part Two, employers liability, works like a liability policy: it responds when you are held legally liable over an employee's work injury, and it pays no more than the limits printed on the policy.
On the standard NCCI form, WC 00 00 00 C, the damages in Part Two B apply where the law permits recovery. They include a third party's claim against you over an employee's injury, damages for care and loss of services, and consequential bodily injury to a spouse, child, parent, brother or sister. On a jobsite, that third-party claim often starts when an injured worker sues the owner or general contractor.
The NCCI form shows the Part Two limits in Item 3.B of the Information Page, the summary page at the front of the policy, as three lines: each accident; disease policy limit; disease each employee. A California policy on its own form may show them on the declarations instead.
The disease policy limit is a total for the term, while the other two reset by accident or by person. A contract that names one amount usually means each line should reach it; one that lists three amounts ties each to a specific line.
For California, no official source states a minimum employers liability limit; the limit is whatever the policy declarations show. The amount you need comes from what you sign: a prime contract, subcontract, lease or franchise agreement can each name one. Many California policies carry $1,000,000 for employers liability, but that is common practice, not a rule, and limits depend on the policy and the carrier.
General contractors who pass limits down can send subs the subcontractor insurance checklist for GCs; a sub with no coverage at all is a separate problem, covered under uninsured sub charges.
Two policies with identical printed limits can behave differently once a lawsuit drags on. On the NCCI form, Part Two D, E says defense expenses are paid in addition to the other amounts payable, so lawyers' bills don't use up the limit. The same wording ends the insurer's duty to defend once it has paid its applicable limit.
California forms can differ. Some California policy forms count defense costs inside the employers liability limit, so money spent defending a suit comes out of the same limit that would pay a settlement. Before treating two California quotes with matching limits as equal, ask for each policy form and read how defense is handled.
Part Two of the NCCI form excludes liability assumed under a contract (Part Two C.1), apart from a warranty that your work will be done in a workmanlike manner. Subcontracts often pair the insurance exhibit with an indemnity clause, a promise to defend and hold the general contractor or owner harmless, and employers liability isn't built to answer that promise.
Whether an indemnity promise is insured typically depends on your general liability policy, so send the clause to whoever writes that coverage. The brokerage behind this site, Gleason Insurance Brokers, LLC, can quote general liability and commercial auto as well, subject to underwriting.
Part One benefits have no dollar limit to stack anything on, so the real question is whether an umbrella or excess policy sits over Part Two. That depends on its schedule of underlying insurance. Check whether your umbrella schedule lists employers liability, and at what limits.
If employers liability isn't scheduled, the umbrella may not respond above your Part Two limits at all. If it expects higher Part Two limits than your workers comp policy carries, a gap can open between the two. Another carrier may write the excess layer, subject to underwriting, so the policies often come from different companies; read them side by side.
| State | Part One Benefits | Employers Liability Limit | Worth Checking |
|---|---|---|---|
| California | Every employer except the state must secure payment of compensation under Labor Code 3700. | No official minimum is stated; the declarations show the limit, and many policies carry $1,000,000. | The form's defense wording, since some forms count defense inside the limit. |
| Arizona | Owed by employers subject to the chapter under Arizona Revised Statutes 23-902(A). | The amount the policy shows; each contract tells you what you need. | NCCI is the state's licensed rating organization; read Item 3.B on your Information Page. |
| Nevada | Industrial insurance is mandatory for an employer with one or more employees. | The amount the policy shows; each contract tells you what you need. | That Nevada is listed on the policy before a crew or store starts work there. |
A California policy may not use the NCCI defense wording, so read the form; for licensing, see California contractor workers comp rules. In Arizona, the Arizona statutory employer rule matters: where you keep supervision or control over a sub's work in your own trade, that sub's crew may be treated as your employees.
In Nevada the coverage is called industrial insurance; the employers liability lines read the same way there. Part Three of the NCCI form gives no coverage in a new state that wasn't on the policy's Item 3.A list at the start unless the insurer hears about the work within thirty days. See Nevada industrial insurance for contractors, and compare the three states in CA AZ NV workers comp differences.
Illustrative scenario
Illustrative only. A California framing company with eight carpenters is offered a subcontract on a mid-rise job. The exhibit asks for employers liability of $1,000,000 on each of the three lines, on the workers comp policy rather than an umbrella, and includes an indemnity clause. The framer's policy shows lower Part Two limits. The owner asks for an endorsement raising all three lines, asks whether the carrier's form counts defense inside the limit, and sends the indemnity clause to whoever writes the company's general liability. A new certificate reaches the general contractor before the crew mobilizes.
Buying an Umbrella Without Reading Its Schedule
A sub hears its employers liability is short of the contract, buys an umbrella and sends a fresh certificate. If the umbrella's schedule doesn't list employers liability, or expects higher Part Two limits than the policy carries, the contract may still not be met. Read the schedule first, and raise Part Two by endorsement if the contract wants the limit on the primary policy.
Policy terms on the NCCI form may be changed only by an endorsement the insurer issues (General A of the form), so a higher employers liability limit is added that way, at renewal or mid-term. The carrier decides whether to offer it, and higher limits typically add premium.
With those papers in hand, request a contractor workers comp quote at the limits your contract names. GCs working in more than one state can start at general contractor workers comp insurance, and more answers are in the workers comp guides.
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No. For California, no official source states a minimum employers liability limit; the amount is whatever your policy shows. Part One benefits are the statutory part of a workers comp policy. A contract, lease or franchise agreement may require a stated limit, and that binds you through the contract, not through workers comp law.
Each accident caps what Part Two pays for one accident, however many employees it injures. Disease each employee caps disease claims for any one person. Disease policy limit caps all disease claims in the policy period combined. On the NCCI form the three lines sit in Item 3.B of the Information Page.
It may sit over Part Two, employers liability, if the umbrella's schedule of underlying insurance lists it. Part One benefits are set by state law with no dollar limit for an umbrella to sit above. Compare the underlying limits the umbrella expects with the limits on your workers comp policy.
It depends on the policy form. The standard NCCI form pays defense in addition to the limit and stops defending once the limit is paid. Some California forms count defense costs inside the limit instead. Ask the carrier for your form and read the employers liability section before comparing quotes.
Because Part Two of the NCCI form excludes liability you take on under a contract, other than a warranty of workmanlike work. An indemnity clause is that kind of promise. Whether it is insured typically depends on your general liability policy, so send the clause to whoever writes that coverage.
Often, yes, by an endorsement the insurer issues, since that is the only way the NCCI form lets policy terms change. The carrier decides whether to offer the higher limit and what it adds to premium. Ask before mobilization so the certificate shows the new limit when the crew arrives, and see workers comp waiver of subrogation for what else a certificate may need.
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Reviewed by David Gleason, Principal, on .
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Employers liability limits read line by line, before the contract is signed.
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