All states require businesses to carry workers compensation insurance, but not all such plans offer comprehensive protection. Missing from some workers comp plans is employers liability insurance, which creates a potentially dangerous hole that only stop gap insurance coverage can fill.

At Risk: Monopolistic States

Businesses located in the so-called monopolistic states of Ohio, North Dakota, Washington and Wyoming are required to purchase workers comp directly from state agencies. These plans do not include the employers liability coverage that is a standard piece of independently-issued workers comp insurance.

A Nightmare Scenario

An employee in North Dakota slips on the ice in front of his workplace and breaks a leg. A workers comp claim is made, and the employee receives financial compensation from the insurer. The employee also files suit against the business, claiming negligence. Because the state-mandated workers comp plan does not include employers liability coverage, the business is forced to pay legal fees and a hefty settlement out of pocket.

Filling the Gap

Stop gap insurance coverage is an endorsement that attaches to a workers comp policy or to a general liability policy and adds coverage for employers liability. This endorsement effectively fills the gap in coverage, paying for legal defense and settlements, up to policy limits, in the event of a claim of employer negligence.

Don’t risk a financial catastrophe. If your business is in a monopolistic state, add stop gap insurance coverage today.