Workers' Comp & Auto · Insurance Term
Employers Liability (EL)
Definition
Employers liability is Part Two of a workers' compensation policy. It covers lawsuits over employee injuries that fall outside workers' comp benefits. It pays defense and damages up to three limits: each accident, disease policy limit and disease each employee.
In Plain English
Workers' comp (Part One) pays benefits set by law. Employers liability (Part Two) covers lawsuits that still reach the employer. One example is a "third-party-over" claim. A hurt worker sues another company, and that company then sues the employer. The three limits often read like this: $1 million each accident, $1 million disease policy limit and $1 million disease each employee.
An umbrella insurance policy often requires employers liability as underlying coverage and sits above it. Contracts may also set minimum employers liability limits.
Texas employers who opt out of workers' compensation insurance have no Part Two either, unless they buy separate coverage. That is why many non-subscribers look at employer's liability or occupational accident policies designed for them.
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Example
Hypothetical and simplified: A warehouse worker hurt by a dock lift receives workers' comp benefits, then sues the lift maker. The lift maker brings the employer into the suit, claiming the employer modified the equipment. Employers liability may defend the employer and pay its share, up to the each accident limit and subject to the policy's terms.
Why It Matters for Texas Property Owners
Texas lets most private employers choose not to carry workers' comp (Labor Code §406.002), so many Texas employers have no employers liability coverage at all. Non-subscribers also lose key defenses in injury suits under §406.033, which raises the stakes of going without coverage.
What to Watch For
- Check the three employers liability limits on your workers' comp declarations.
- Confirm your umbrella's required underlying employers liability limits match what you carry.
- Review contracts that call for specific employers liability limits.
- If you are a non-subscriber, ask about liability coverage designed for Texas non-subscribers.
Sources
- Texas Department of Insurance: Employers without workers' comp (non-subscribers)
- Texas Labor Code §406.033 (defenses unavailable to non-subscribers)
Last updated October 14, 2026 · Primesure editorial team · How We Write