If New Jersey rejects workers' compensation, what must the employer purchase?

• A. Employers liability insurance
• B. Medical expense coverage
• C. Auto liability insurance
• D. Property liability insurance

Answer: (A)

In New Jersey, if an employee signs a valid waiver to reject workers’ compensation, the employer must carry Employers’ Liability Insurance. This coverage protects the employer against lawsuits that an employee could bring for injuries arising out of and in the course of employment, which would have been handled by workers’ compensation if the injury had not been rejected. It serves as the employer’s backup to address potential common-law liability from a rejected workers’ comp claim. Medical expenses, auto liability, and property liability address different exposures and are not the specific requirement created by a workers’ compensation rejection.