Employers liability

The two halves of workers' comp

A workers' compensation policy does two different jobs. Part A pays the state-mandated benefits when an employee is hurt on the job — medical and wage benefits, on a no-fault basis, with no dollar limit (the certificate just shows "statutory"). Part B — employers liability is different, and it is the number your requirements checklist should name: it covers the employer's legal liability when someone sues over a workplace injury, and it carries real dollar limits. Part A pays the injured worker; Part B defends against the lawsuit.

Why a GC cares about Part B

The exposure that should worry you is the "action over" (or third-party-over) claim. A sub's employee is injured on your site and collects workers' comp from the sub — then sues you, the general contractor, as a third party who allegedly contributed to the injury. You turn around and bring the sub in to indemnify you. Employers liability is the coverage on the sub's side that responds to that suit, working alongside your additional-insured status and the waiver of subrogation. Thin E.L. limits leave that whole chain underfunded.

The three boxes, and what each one actually caps

They are printed as a stack of three and read as one number, which is a mistake, because they answer different claims and the two nobody reads are the ones that turn up later.

• E.L. Each Accident — the cap for a single accident, however many employees were hurt in it. This is the one everybody looks at, and the one a scaffold collapse or a trench failure runs into.
• E.L. Disease — Each Employee — the cap per employee for an occupational disease claim. Not an accident: a condition that developed over time. Silica, noise-induced hearing loss, solvent exposure, repetitive strain.
• E.L. Disease — Policy Limit — the aggregate for all disease claims in the policy period, across every employee. On a crew exposed to the same condition, this is the ceiling that matters and the one most likely to be exhausted by somebody else's job before your claim arrives.

The disease pair is where the late claims land, and on a certificate they are frequently identical to the each-accident figure because the policy was written to a standard package rather than to a risk. Worth reading all three rather than the first.

None of these three tells you how often this subcontractor's crew actually gets hurt — they are the ceilings the policy will pay, chosen when it was written. The number that describes their claims history is the experience modification rate, and it is not on the certificate at all.

Four states where Part B simply does not exist

This is the one that catches careful people, and it is entirely invisible from a certificate. In North Dakota, Ohio, Washington and Wyoming, workers' compensation is sold only by the state fund — private carriers cannot write it. And the state fund policy provides the statutory benefits and nothing else. There is no Part B. Employers liability is not thin on those policies; it is absent.

So a subcontract requiring "$1,000,000 employers liability" from a Washington subcontractor is requiring something their perfectly valid, fully compliant comp coverage does not contain and cannot be made to contain. The paperwork often does not look like a refusal either — state-fund coverage frequently arrives as the state's own certificate rather than an ACORD 25, so there is no E.L. row to be blank.

The remedy has a name: stop-gap employers liability, added by endorsement to the subcontractor's general liability policy, or occasionally written standalone. It fills exactly the hole the monopolistic fund leaves, and it is the thing to ask for by name. If you work across state lines at all, it is worth knowing which of your subs are in those four states before the question arrives as a claim.

What E.L. limits to require

• Adequate E.L. limits — a common floor is $1,000,000, or $500,000 each accident / $500,000 disease-each employee / $500,000 disease-policy limit. Set yours from your own upstream contract.
• The waiver of subrogation in your favor — endorsement WC 00 03 13 — on the same policy, so the sub's carrier can't recover from you after paying a claim.
• Watch for a claimed exemption. A sub operating under a workers' comp exemption has no Part A and no employers liability behind them — a separate exposure worth confirming.
• Ask for stop-gap where the sub is in North Dakota, Ohio, Washington or Wyoming. Their comp is a state-fund policy with no Part B at all, so the E.L. limit your contract asks for has to come from an endorsement on their general liability instead.

Hi [Agent name],

[Sub name] is working with us on [Project]. Please send a current ACORD 25 showing:
1) Workers' compensation with statutory limits, and
2) Employers liability limits (E.L. Each Accident / Disease-Each Employee / Disease-Policy Limit).

We also require the waiver-of-subrogation endorsement, WC 00 03 13, showing it applies to [Your company] — please attach that endorsement, not just the certificate.

Thanks,
[Your name], [Your company]