Coverage Part A
The workers compensation statutory coverage section that pays benefits as required by state law, with no dollar limit on the insurer's obligation.
What It Is
Coverage Part A is the Workers Compensation Insurance section of the workers compensation and employers liability policy. Under Coverage Part A, the insurer agrees to pay all benefits that the named insured is required to pay under the applicable state workers compensation statute. This includes medical expenses, temporary and permanent disability benefits, vocational rehabilitation, and death benefits.
Coverage Part A has no dollar limit. The insurer's obligation is to pay whatever the state statute requires, regardless of amount. This is a unique feature of workers compensation — unlike virtually every other insurance coverage, there is no per-occurrence or aggregate limit on Coverage Part A. The insurer is bound by the statutory benefit schedule.
The coverage applies to each state listed on the policy's Information Page (Item 3.A) and any state listed in Item 3.C (Other States). States listed in Item 3.A are the specific states where the insured has current operations, while Item 3.C provides coverage for states where the insured might begin operations during the policy term.
Why It Matters for Brokers
Because Coverage Part A is unlimited, the key broker concern is ensuring that all applicable states are covered. If an employee is injured in a state that is not listed on the policy (and that state is not covered under Item 3.C), there may be no coverage for that claim. Brokers must carefully review the state schedule at inception and renewal, especially for clients with operations in multiple states or clients that are expanding into new states.
Real-World Example
A demolition contractor based in Texas has workers comp listing TX, OK, and LA in Item 3.A. The contractor wins a project in Arkansas and sends a crew there without notifying the broker. A worker is injured on the AR job site, requiring $175,000 in medical treatment and $80,000 in disability benefits. Arkansas is not listed on the policy. If Arkansas is in Item 3.C (Other States), Coverage Part A responds. If it is not, the contractor may have no coverage for a $255,000 claim — and may also face penalties from the Arkansas Workers Compensation Commission for operating without coverage.
Common Mistakes
- 1Not listing all states where the insured currently has or may have employees in Items 3.A and 3.C of the workers comp policy.
- 2Assuming Coverage Part A limits are the same as Coverage Part B limits — Part A is unlimited statutory; Part B has specific dollar limits.
- 3Failing to update the state schedule when a client expands operations to new states during the policy period.
How brokerageaudit.com Handles This
Policy Checker extracts the complete state schedule from the workers comp policy (Items 3.A, 3.B, and 3.C) and compares it against the client's registered business locations and project addresses. It flags any state where the client reports operations but that is not on the policy. COI Manager accurately reflects the covered states on workers comp certificates.