What type of coverage is available for risks that select to self-insure most of their workers' compensation losses?

• A. Excess WC Insurance
• B. General Liability Insurance
• C. Primary WC Insurance
• D. Umbrella Insurance

Answer: (A)

Excess workers’ compensation insurance is the layer that protects employers who self-insure most of their WC losses. A company funds losses up to a self-insured retention (the internal, self-funded amount), and the excess WC policy kicks in above that level to cover additional losses. This setup shields the employer from catastrophic or unusually costly claims while allowing them to manage the smaller, routine losses themselves.

General liability insurance covers non-WC risks like injuries on the job that aren’t tied to workers’ comp, or property damage, so it isn’t the right fit for protecting WC exposures. Primary workers’ compensation would pay first, which undermines the purpose of self-insuring most losses. An umbrella policy extends other liability coverages beyond their limits, but for workers’ comp the standard and most effective approach to wrap around a self-insured WC program is excess WC insurance.