If I already have workers compensation, why does the policy also have employers liability?

What this assumes

• The employer is a California employer subject to Labor Code section 3700 [2].

• The policy is a workers compensation and employers liability policy, which is the form the regulator describes as carrying both parts [1].

• You are asking what the two parts do rather than what limits to carry on either.

What changes the answer

• Whether the injury or disease is subject to the workers compensation laws, which is the line the regulator draws between the two parts [1].

• Whether the employer has secured compensation at all, since section 3700 requires it and lists the permitted ways, including insuring with an authorized insurer or obtaining a certificate of consent to self-insure [2].

• What Part Two limit is carried, since that half behaves like liability insurance while Part One pays statutory benefits [1].

• What any contract requires, because a requirement often names an employers liability figure separately from the compensation coverage.

Where it varies by state, form, carrier, or fact

• This describes the California position. Other states structure the compensation bargain and the employers liability half differently, and monopolistic state fund states may not offer Part Two on the same policy at all.

• Whether a particular injury or disease is subject to the compensation laws is a legal question decided on the facts, not something a general description settles.

• Self-insurance is a permitted route to securing compensation, through a certificate of consent to self-insure from the Director of Industrial Relations [2], and that changes how the two halves are arranged.

Next actions

1. Look at the declarations and find the Part Two limits, which are stated separately from the compensation coverage [1].

2. Compare those limits against what any contract you have signed requires, since the two parts are specified separately.

3. If you are relying on self-insurance, confirm the certificate of consent to self-insure is current, since that is the alternative route section 3700 permits [2].

4. Ask your broker what Part Two limits are available and what changes between them, rather than accepting the figure that came on the renewal.

Source ledger

2 sources. Every citation number above resolves to a record below. Nothing here sits behind an account.

1. [1]

   Workers' Compensation (Commercial Insurance Guide series)(opens the original record on California Department of Insurance)

   California Department of InsuranceRegulatorPrimaryJurisdiction CALast checked August 31, 2026Updates: Updated periodically by CDI; the page carries its own revision date, so re-check it before each content review cycle.ID cdi-wc-commercial-guide

   What this source supports (22)

   • CDI states that all California employers must provide workers compensation benefits to their employees under California Labor Code Section 3700.
   • CDI states that there are five basic types of workers compensation benefits: medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits.
   • CDI states that employers' liability insurance is offered under Part Two of a workers' compensation and employers' liability insurance policy, and that Part Two protects the employer against instances in which an employee's injury or disease is not subject to the workers' compensation laws.
   • CDI states that classifications that group distinct and identifiable occupations, industries, or businesses are developed and assigned codes by the Workers' Compensation Insurance Rating Bureau of California (WCIRB) and are approved by the Insurance Commissioner.
   • CDI states that the payroll for each classification is estimated and then multiplied, per each $100 of payroll, by the applicable rate.
   • CDI states that generally an experience modification of less than 100 percent reflects better-than-average experience and an experience modification of more than 100 percent reflects worse-than-average experience, and describes the modification as comparing an employer's loss history against similar-sized employers in the same industry classification.
   • CDI states that California workers compensation insurers operate under an open rating system, meaning individual companies set rates based on their ability to adequately cover losses and expenses in each industry classification.
   • CDI states that workers' compensation insurers assign a specific rate to each industry classification code and that these rates must be filed with the CDI.
   • CDI states that the final premium of a workers' compensation policy cannot be calculated until the policy term is over and the employer's payroll records have been audited.
   • CDI states that a dividend plan is a type of rating plan that allows an employer to share in the profits of its workers' compensation insurer in the form of a dividend.
   • CDI states that to become self-insured a business must obtain a certificate from the DIR's Office of Self-Insurance Plans (OSIP).
   • CDI states that State Fund is a state-operated entity that exists in order to transact workers' compensation on a non-profit basis, competes with private workers' compensation insurance companies for business, and also operates as the insurer of last resort if private companies are not willing to offer workers' compensation insurance.
   • Classifications that group distinct and identifiable occupations, industries, or business are developed and assigned codes by the Workers' Compensation Insurance Rating Bureau of California (WCIRB) and are approved by the Insurance Commissioner.
   • Workers' compensation insurers generally use these classifications when writing workers' compensation policies.
   • Insurance companies are allowed to develop and submit their own classification system to the CDI for approval, but this is uncommon due to the strict standards required to file a separate workers' compensation classification system.
   • The payroll for each classification is estimated and then multiplied, per each $100 of payroll, by the applicable rate, and the sum of the equation is referred to as the base premium.
   • The base premium continues to be modified, increased or decreased, using rating plans (usually schedule or judgment rating) and by experience modification.
   • An employer's experience modification is calculated from payroll and loss information that insurance companies are required to submit to the WCIRB on an annual basis, using a mathematical formula approved by the CDI.
   • An experience modification of less than 100 percent reflects better-than-average experience, and an experience modification of more than 100 percent reflects worse-than-average experience.
   • The WCIRB provides a policyholder ombudsman, who is available to answer questions from employers on classification, experience modification, and rating issues.
   • The final premium of a workers' compensation policy cannot be calculated until the policy term is over and the employer's payroll records have been audited.
   • Title 10, California Code of Regulations Sections 2509.40 through 2509.78 list detailed procedures for disputing experience modifications and classification assignments, including appeals to the CDI.

   Published: 2025-06-23

   Active
2. [2]

   California Labor Code section 3700(opens the original record on California Legislative Information (Legislative Counsel of California))

   California Legislative Information (Legislative Counsel of California)Primary lawPrimaryJurisdiction CALast checked August 31, 2026Updates: Amended by the Legislature; check leginfo for the current text each session.ID lab-3700

   What this source supports (5)

   • The section opens: Every employer except the state shall secure the payment of compensation in one or more of the following ways.
   • One listed method is being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in California.
   • Another listed method is securing from the Director of Industrial Relations a certificate of consent to self-insure, either as an individual employer or as one employer in a group of employers.
   • A further listed method applies to political subdivisions and public entities, which may secure a certificate of consent to self-insure against workers compensation claims.
   • The section as displayed carries the amendment note: Amended by Stats. 2002, Ch. 905, Sec. 10. Effective January 1, 2003.

   Effective: 2003-01-01

   Active

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