Workers’ Compensation Insurance
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Stop gap coverage

Stop gap coverage protects business owners from lawsuits over workplace injuries when employer’s liability insurance is not included in a workers’ comp policy in monopolistic states.

What is stop gap coverage?

The term stop gap coverage, or a stop gap endorsement, refers to an employer filling a gap in workers’ compensation insurance by purchasing an additional policy.

Stop gap coverage protects business owners from lawsuits filed over workplace injuries. Business owners are protected from such lawsuits by employer’s liability insurance, which is typically included in workers’ compensation coverage.

However, in states that require businesses to purchase workers’ compensation insurance from a state fund, this coverage may be excluded.

The following states run monopolistic workers’ comp funds:

Business owners usually only need to look into stop gap insurance if they are located in the above states. Otherwise, employer’s liability insurance is typically included in your workers’ compensation coverage at no additional cost.

How do I get stop gap coverage?

While workers’ compensation insurance pays employees for job-related injuries, employer’s liability insurance is a separate clause of the policy. It protects the employer from being held liable for worker injury or illness.

Since a workers’ compensation policy from a monopolistic state fund does not include the part of the policy dealing with employer liability, employers in monopolistic states should consider purchasing stop gap coverage from a private insurance provider. 

Stop gap coverage will help protect against allegations from your employees or their families that you have not provided a safe work environment. 

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Updated: February 5, 2024
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