The scope and amount of workers' compensation protection strictly follows state law. Employer's liability insurance, like other liability protection, contains policy exclusions. These include:
- Liability assumed under contract.
- Punitive or exemplary damages because of bodily injury to an individual employed in violation of law, with or without the employer's knowledge or the knowledge of any of its executive officers.
- Obligations imposed by law regarding workers' compensation, occupational disease, unemployment, or disability benefits, or equivalent. This exclusion shifts coverage to the workers' compensation section of the policy, or to other types of insurance policies designed to address work-related benefit obligations.
- Bodily injury intentionally caused or aggravated by the employer.
- Bodily injury occurring outside the United States, its territories and possessions, or Canada.
- Damages arising from employment practices, policies, acts or omissions, including evaluation, demotion, reassignment, discipline, defamation, harassment, discrimination, termination. This exclusion shifts coverage to a separate employment practices liability or directors' &officers' liability policy.
- Bodily injury to employees subject to federal statutes, including the Longshore &Harbor Workers' Compensation Act, the Nonappropriated Fund Instrumentalities Act, the Outer Continental Shelf Lands Act, the Defense Base Act, the Federal Coal Mine Health &Safety Act, and the Federal Employer's Liability Act.