Stop gap coverage
What is stop gap coverage?
Stop gap insurance protects employers against negligence claims when employees file lawsuits after getting injured or sick on the job. It's typically needed by businesses in monopolistic workers' comp states. Because it covers a gap in state-run insurance programs, it's called "stop gap insurance."
Why is stop gap coverage necessary in monopolistic states?
Stop gap coverage is necessary in monopolistic states because their state workers' compensation programs don't include employers liability insurance. This coverage matters because employees who accept workers' comp benefits usually can't sue for their injuries - but if a lawsuit does happen, employers liability helps pay their legal costs. Without it, businesses may have to cover these expenses themselves.
In most states, small business owners can get workers' comp through a private insurance company, like Progressive Commercial. When they do, it automatically includes employers liability coverage.
To better protect themselves, businesses in monopolistic states can purchase stop gap employers liability for lawsuits related to workers' comp claims.
If you're unsure what kind of business insurance you need to stay safe and meet state requirements, we can help. Contact our experts to discuss what coverage and limits are right for you.
What are monopolistic states?
There are only four monopolistic states that require small business owners to purchase workers' compensation through the state: North Dakota, Ohio, Washington, and Wyoming. Small business owners in these states can work with Progressive Commercial to get the stop gap liability coverage they need.
How does stop gap insurance work?
Stop gap liability insurance works by supplementing your state workers' compensation coverage with protections for your business. Essentially, workers' comp protects your employees, while stop gap coverage protects you.
If an employee gets hurt on the job, you can make a claim on your state policy to help cover their medical expenses, rehabilitation costs, and lost wages.
If the employee sues for their injuries, business owners with stop gap coverage can make an additional claim on their private insurance to help with things like:
- Negligence claims: Stop gap insurance protects your business if you're accused of unsafe working conditions and the employee claims the injury was your fault.
- Legal defense costs: Covers attorney fees, court costs, and other legal expenses to reduce your out-of-pocket costs.
- Settlements and judgments: Helps pay court-awarded damages related to workers' comp lawsuits.
When you make a stop gap insurance claim with Progressive Commercial, our expert agents will guide you through the claims process and give you the support you need.
How do I get stop gap insurance coverage?
Getting stop gap insurance through Progressive Commercial is easy. Just follow these steps:
- Determine whether you live in a state where stop gap coverage is available.
- Check whether your business needs workers' compensation insurance.
- Get a quote based on your business (location, number of employees, etc.).
- Add coverage to your business insurance policy.
If you're unsure whether stop gap employers liability insurance is right for you, our experts can help. Contact Progressive Commercial or start an online quote to evaluate your needs and get a customized quote that includes competitive prices on the coverages that are right for your business.
Common questions about stop gap insurance
When can an employee sue me over a workplace injury?
Employee injuries are most often resolved through workers' compensation claims. When that happens, the employee usually gives up their right to sue you over the injury in exchange for a simple path to compensation. However, a worker may be able to sue if:
- You didn't have adequate workers' comp coverage
- The injury was intentional, such as a physical altercation with their employer
- You retaliated against them for filing a workers' comp claim
Do I need stop gap coverage?
It depends. Stop gap liability coverage is only available in the four monopolistic states. If you live in any other state, this coverage isn't available as a standalone option. Instead, it's included on your private workers' comp insurance. If you do live in a monopolistic state, stop gap coverage isn't required by law, but it's a good idea for most small businesses with employees.
Is stop gap insurance the same as professional liability?
No. Stop gap coverage and professional liability can both protect you against the cost of a lawsuit, but they cover different kinds of events. Stop gap insurance is for lawsuits related only to workers' comp claims. Professional liability insurance covers lawsuits that arise when clients believe you made a mistake.
