Per Statute (Workers Compensation)

Overview

Per Statute is the standard limit designation for Workers' Compensation insurance on the ACORD 25 form. Unlike other coverage types that show specific dollar limits ($1,000,000, $2,000,000, etc.), Workers' Compensation benefits are defined by state law — not by the insurance policy. The "Per Statute" checkbox indicates that the policy will pay whatever benefits the applicable state's workers' compensation statute requires, without a fixed ceiling.

How It Works

Every state (except Texas, where it is generally optional for private employers) requires employers to carry Workers' Compensation insurance. The benefits — including medical treatment, wage replacement, disability payments, and death benefits — are determined by state statute and vary from state to state. The insurance policy does not set a limit; it simply agrees to pay whatever the statute mandates.

This is fundamentally different from liability coverage, where the insurer agrees to pay up to a specific dollar amount. Under Workers' Compensation, the insurer's obligation is open-ended — it pays whatever the law requires for as long as the law requires it. A severe injury that requires lifetime medical care can result in Workers' Compensation payments totaling millions of dollars over the injured employee's lifetime.

Workers' Comp vs. Employers' Liability

The Workers' Compensation row on the ACORD 25 actually includes two related coverages:

Part A — Workers' Compensation (Per Statute): Covers the statutory benefits owed to injured employees. No dollar limit. This is the "Per Statute" portion.

Part B — Employers' Liability: Covers the employer's liability for employee injuries in situations not covered by the workers' compensation statute — such as third-party-over actions, dual-capacity claims, or claims by employees in states where the employer did not carry the required coverage. Employers' Liability has specific dollar limits:

• E.L. Each Accident: Maximum per workplace accident (typically $500,000 or $1,000,000)
• E.L. Disease — Each Employee: Maximum per employee for occupational disease claims
• E.L. Disease — Policy Limit: Aggregate maximum for all disease claims

Why It Matters for Compliance

When reviewing a certificate, the "Per Statute" checkbox on the Workers' Compensation row should always be checked. If it is not — or if the Workers' Compensation row is blank — the vendor may not carry Workers' Comp insurance at all. This is a critical compliance failure because:

1. Legal requirement: In 49 states, employers must carry Workers' Comp. A vendor without it is likely violating state law.
2. Your liability: If an uninsured vendor's employee is injured on your property, you may be considered the "statutory employer" and liable for Workers' Comp benefits under many states' laws.
3. OSHA and regulatory exposure: Allowing uninsured workers on your premises can trigger regulatory penalties.

Also verify the state in which coverage applies. Workers' Comp laws are state-specific. If a vendor's policy covers employees in Ohio but the work is being performed in California, the coverage may not apply.

Monopolistic State Funds

A few states operate monopolistic or exclusive state funds for Workers' Compensation (Ohio, North Dakota, Washington, Wyoming). In these states, employers must purchase Workers' Comp from the state fund rather than from private insurers. Certificates from vendors in these states may look different and list the state fund as the insurer.

Example

A general contractor requires all subcontractors to provide evidence of Workers' Compensation insurance. A subcontractor's certificate shows the Workers' Compensation row with "Per Statute" checked, indicating the policy pays benefits as required by state law. The Employers' Liability limits show $1,000,000 / $1,000,000 / $1,000,000 (Each Accident / Disease-Each Employee / Disease-Policy Limit). The contractor verifies that the policy covers the state where the project is located and that no officers or partners are excluded. The subcontractor is compliant.