Workers comp limits: statutory coverage and employer's liability limits

The short answer

A standard workers' comp policy has two parts, and they have different limits. Part One, workers' compensation, has no dollar limit. It pays whatever benefits your state's law requires. This is why you see "statutory" in the limits box on a certificate of insurance. Part Two, employer's liability, does have dollar limits. The standard limits are $100,000 for each accident, $500,000 for all disease claims during the policy, and $100,000 for disease for each employee. You can buy higher limits, and many contracts ask for $1 million.

Part One: statutory limits

In the standard policy, the insurer promises to "pay promptly when due the benefits required of you by the workers compensation law." There is no cap on that promise. If a worker needs years of medical care or wage benefits, the policy keeps paying what the law requires for the states listed in Item 3.A of the policy's Information Page. The Pennsylvania rating bureau's manual puts it plainly: "There is no limit of liability in the standard policy for Part One."

This does not mean benefits are unlimited for the worker. Each state's law sets how much the worker gets, such as a weekly maximum for lost wages. That is a limit on the benefit, not on your policy. See "State benefit maximums" below.

Part Two: employer's liability limits explained

Employer's liability pays when you are sued over a work injury, and it has three separate limits. On a certificate of insurance or the policy's Information Page (Item 3.B), they usually appear in this order:

• Bodily injury by accident, each accident: $100,000. This is the most the policy pays for one accident, no matter how many workers are hurt.
• Bodily injury by disease, policy limit: $500,000. This is the most the policy pays for all disease claims during the policy period.
• Bodily injury by disease, each employee: $100,000. This is the most it pays for disease claims by any one worker.
• That is why the standard limits are called "100/500/100." NCCI's manual lists the same numbers in a different order (accident, disease per employee, disease policy limit), which is why higher limits are written as 500/500/500 or 1,000/1,000/1,000.
• Legal defense costs are paid in addition to the limits. But the insurer has no duty to keep defending you once it has paid the full limit.

What employer's liability covers

Workers' comp laws usually stop an injured worker from suing you. Employer's liability covers the lawsuits that still get through. The standard policy lists these types of claims:

• Third party over actions: your worker sues another company, such as an equipment maker or a general contractor, and that company sues you.
• Care and loss of services: for example, a spouse sues for the loss of the worker's help at home.
• Consequential bodily injury: a spouse, child, parent, brother, or sister of the injured worker claims their own injury from the event.
• Dual capacity: a claim against you in a role other than employer, such as the maker of a product the worker was hurt by.
• Claims that fall outside the workers' comp law in your state, where the worker is allowed to sue.

What employer's liability does not cover

Part Two has exclusions. The main ones in the standard policy are:

• Injuries you cause or make worse on purpose.
• Punitive damages for injuring a worker you employed in violation of the law, such as an underage worker.
• Fines or penalties for breaking federal or state law.
• Liability you take on under a contract, such as a hold harmless clause. That is usually covered by contractual liability under your general liability policy.
• Injuries outside the United States, its territories, and Canada, except for U.S. citizens or residents who are temporarily abroad.
• Claims covered by federal programs like the Longshore Act, unless your policy adds them by endorsement.

Raising your limits and what it costs

Higher employer's liability limits are added to the policy for a small extra charge. The charge is a percentage of your workers' comp premium. In NCCI's national table, as published in the North Carolina Basic Manual, the charges include:

• 500/500/500: 0.8% of premium, with a $75 minimum.
• 1,000/1,000/1,000: 1.1% of premium, with a $120 minimum.
• Higher limits up to 10,000/10,000/10,000 are also listed in the national table.
• Example: on $20,000 of premium, raising to $1 million limits at 1.1% adds about $220 a year.
• Some states use their own table. In Pennsylvania, 1,000/1,000/1,000 is 1.4% of premium. The limits must be the same for every state listed on the policy.

Limits required by contracts and umbrella policies

Many customers, general contractors, landlords, and government agencies set a minimum employer's liability limit in their contracts. Read the insurance section before you sign, and send it to your agent. Two official examples:

• Federal contracts: the Federal Acquisition Regulation (FAR 28.307-2) requires workers' comp and at least $100,000 of employer's liability for work on a federal installation, with exceptions for monopolistic states.
• New York City Housing Authority: its vendor insurance rules require statutory workers' comp plus employer's liability of $1,000,000 each accident, $1,000,000 each employee, and $1,000,000 policy limit.
• Umbrella and excess policies: if you buy one, check whether it lists employer's liability as underlying insurance and what limit it expects. If your Part Two limit is lower than the umbrella requires, you may have to pay the gap yourself.
• Your certificate of insurance should show all three employer's liability limits. A certificate that only says "statutory" covers Part One only.

New York: no limit for New York employees

New York is an exception. When New York is listed in Item 3.A of your policy, New York rules make employer's liability unlimited for employees covered by the New York workers' comp law. New York's highest court quoted the state manual this way in Preserver Insurance Co. v. Ryba (2008): "There is no limit of liability for employees subject to the New York Workers' Compensation Law."

The same case shows the risk of getting the policy wrong. The employer was based in New Jersey, and New York was only listed in Item 3.C (other states). The court held that the $100,000 standard limit applied. New York also requires out-of-state employers with New York operations to carry a policy that lists New York in Item 3.A.

Monopolistic states and stop gap coverage

In North Dakota, Ohio, Washington, and Wyoming, required coverage comes from the state fund. These state policies pay the workers' comp benefits but generally do not include employer's liability. North Dakota WSI says its All States Coverage does not provide employer liability coverage, for example.

To fill the gap, employers buy "stop gap" employer's liability from a private insurer. It is usually added to a general liability policy or to a private workers' comp policy for your other states. Washington's Department of Enterprise Services explains this in its out-of-state workers' comp FAQ. Make sure the stop gap limit matches what your contracts and umbrella policy require. Our guide to monopolistic workers comp states has the details.

State benefit maximums

Separate from policy limits, every state caps the weekly wage benefit an injured worker can receive. Most states tie the cap to the statewide average weekly wage and update it every year, often on January 1 or July 1. A few current examples:

• Pennsylvania: $1,394 a week for injuries on or after January 1, 2026, which equals the 2026 statewide average weekly wage.
• New York: $1,281.50 a week for injuries on or after July 1, 2026.
• Wage benefits are usually about two thirds of the worker's pay, up to the state maximum. Higher earners hit the cap first.
• Many states also limit how many weeks some benefits last, and set a minimum weekly benefit.
• Your state guide lists the current maximum and minimum with a link to the agency's rate page.

Checklist: choosing and checking your limits

Use this list when you buy or renew your policy:

• Confirm Part One shows every state where you have workers in Item 3.A.
• Check your Part Two limits in Item 3.B. The default is 100/500/100.
• Gather the insurance sections of your contracts and leases, and raise your limits to the highest one required. $1 million is common.
• Make your employer's liability limit match what your umbrella policy expects.
• Add stop gap coverage for any work in North Dakota, Ohio, Washington, or Wyoming.
• Ask for a certificate of insurance that shows all three limits, and check it before you send it to a customer.