Glossary / People & market / Employers' Liability Insurance

Employers' Liability Insurance

Also known as: employers liability · Coverage B · EL insurance

People & market

The part of a workers' compensation policy that covers employee-injury lawsuits falling outside the no-fault workers' comp system.

Employers' Liability insurance is the companion coverage to Workers' Compensation, often called "Coverage B" of a workers' comp policy. While workers' comp pays statutory medical and wage benefits regardless of fault, Employers' Liability responds when an employee (or a related party) sues the employer over a workplace injury in ways the no-fault system does not cover, such as negligence, third-party-over actions, or consequential family claims. Vendor contracts and primes routinely require it, usually at a $1,000,000 limit.

Common vendor contract language

"Employers' Liability with limits of not less than $1,000,000 each accident / $1,000,000 disease each employee / $1,000,000 disease policy limit."

Related Terms

General Liability Insurance (GL) Certificate of Insurance (COI) Defense Base Act (DBA) Waiver of Subrogation Additional Insured

Where you'll see it

Vendor contractCOIQuotePolicy

Why it matters for your business

  • Nearly every vendor contract that requires Workers' Comp also requires Employers' Liability, typically at $1M.
  • Fills the gap when an employee injury leads to a lawsuit rather than a standard comp claim.
  • Required as part of the core coverage stack to sell to primes and enterprise clients.

People also ask

What is Employers' Liability insurance?

Employers' Liability is the part of a workers' compensation policy (Coverage B) that protects the employer against lawsuits arising from workplace injuries that fall outside the no-fault workers' comp system, for example negligence suits, third-party-over claims, or related family claims. It is usually required alongside workers' comp in vendor contracts, typically at a $1,000,000 limit.

What is the difference between workers' comp and Employers' Liability?

Workers' Compensation (Coverage A) pays statutory medical and wage benefits to an injured employee regardless of fault. Employers' Liability (Coverage B) responds when the employer is sued over that injury in a way the no-fault system does not resolve. The two are written together on one policy.

What Employers' Liability limit do contracts require?

The most common requirement is $1,000,000 each accident / $1,000,000 disease each employee / $1,000,000 disease policy limit. Larger primes may require higher limits, reachable with an umbrella policy. Always confirm the exact figures in your contract's insurance exhibit.

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Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.

Reviewed by Andrei Craciunescu, CA Licensed Insurance Broker #4467994

Last updated: July 2026.