Injuries can happen on the job. To protect your business as an owner, you will typically purchase workers’ compensation insurance.
This type of insurance usually includes employers’ liability coverage. It protects you if an employee sues for damages beyond the basics of the policy. So, does your business need to stop gap insurance coverage benefits, too?
What is Stop Gap Insurance?
Stopgap insurance is when an employer purchases an additional policy to fill a gap in their workers’ compensation coverage. This gap in coverage is present in the following four locations, known as monopolistic states:
- North Dakota
What is a Monopolistic State?
In monopolistic states, workers’ compensation coverage must be purchased from the state fund and cannot be obtained directly from an insurance company. These state policies do not include employers’ liability coverage.
You will likely need to add stop gap insurance benefits if you are a staffing agency, hiring manager, or employer in one of these states. It will provide the additional liability coverage required to safeguard your business.
What Does Stop Gap Insurance Cover?
This type of insurance covers expenses associated with lawsuits filed by employees who become injured on the job. It will help prevent workers from holding the employer liable for illness or injury.
If you have employees in any of the four monopolistic states, the addition of a stopgap endorsement can protect your business from financial loss.