3.3 Maryland Liability & Workers' Compensation Insurance

Maryland Workers' Compensation

Coverage Requirements

Maryland has one of the broadest workers' compensation requirements in the nation:

Required Benefits

Workers' compensation in Maryland provides:

Benefit Limits

Maryland sets maximum weekly benefit amounts:

• Maximum weekly benefit tied to State Average Weekly Wage (SAWW)
• Benefits adjusted annually
• No minimum waiting period for medical benefits
• 3-day waiting period for wage loss benefits (waived if disability exceeds 14 days)

Workers' Compensation Commission

The Maryland Workers' Compensation Commission oversees the system:

• Adjudicates disputed claims
• Approves settlements
• Monitors employer compliance
• Maintains injury statistics

Commercial General Liability (CGL)

Coverage Components

CGL Coverage Triggers

Typical CGL Limits

Professional Liability Insurance

Errors and Omissions (E&O) Coverage

Professional liability protects against claims of:

• Negligent acts in professional services
• Errors or mistakes in work product
• Failure to perform professional duties
• Misrepresentation or bad advice

Professionals Requiring E&O

• Insurance producers and agents
• Real estate professionals
• Attorneys and accountants
• Healthcare providers
• Financial advisors
• Architects and engineers

Claims-Made Policies

Most professional liability uses claims-made coverage:

Umbrella and Excess Liability

Purpose of Umbrella Policies

Umbrella liability provides:

• Additional limits above underlying policies
• Broader coverage than underlying policies
• Drop-down coverage for gaps in underlying coverage
• Higher limits for catastrophic losses

Underlying Insurance Requirements

Typical umbrella policies require:

Exam Tip: Maryland requires workers' compensation for employers with just ONE employee - one of the lowest thresholds in the nation. Workers' comp is the exclusive remedy, meaning employees typically cannot sue their employer for workplace injuries.

Maryland's one-employee workers compensation threshold

Maryland has one of the broadest workers compensation mandates in the country: coverage is required for an employer with one or more employees, with only narrow exemptions (certain agricultural and domestic workers). The system is no-fault - the employee receives statutory benefits without proving employer fault - and it is the exclusive remedy, meaning the employee generally cannot sue the employer in tort for a workplace injury. That exclusive-remedy bargain is why employers also buy Part Two Employers Liability (and, in lawsuits the statute does not cover, the CGL) to address third-party-over and consortium claims.

Benefits, waiting period, and the AWW formula

Maryland benefits follow the national pattern: all reasonable and necessary medical care, temporary total disability at two-thirds of the average weekly wage (AWW) subject to the State Average Weekly Wage (SAWW) maximum, temporary partial, permanent partial (scheduled by body part), permanent total, and death benefits to dependents. There is no waiting period for medical care; wage-loss benefits carry a 3-day waiting period that is waived if disability exceeds 14 days. Worked example: a worker earning a $900 AWW receives $600/week TTD (two-thirds), capped by the SAWW maximum if lower.

The Workers' Compensation Commission and disputes

The Maryland Workers' Compensation Commission administers the system - it adjudicates disputed claims, approves settlements, monitors employer compliance, and keeps injury statistics. An employer that fails to carry required coverage faces penalties and personal exposure to benefit costs. For the exam, connect the dots: one-employee trigger, no-fault exclusive remedy, statutory benefits tied to AWW/SAWW, and the Commission as the adjudicating body.

Commercial liability lines Maryland businesses layer on

Beyond workers comp, Maryland businesses build a liability program from the CGL (Coverage A bodily injury/property damage, Coverage B personal and advertising injury, Coverage C medical payments, with typical $1M occurrence / $2M aggregate limits), professional liability / E&O for service firms (usually claims-made with a retroactive date and tail), and a commercial umbrella that sits above the auto, CGL, and employers-liability underlying limits.

A common structure question: an umbrella requires stated underlying limits (for example $1,000,000 CGL and split auto limits) and drops down only after those are exhausted - it does not replace the primary policies.