Stop gap coverage, also known as a stop gap endorsement, is a type of coverage an employer uses to fill in a gap in workers’ compensation insurance by buying an additional policy. Such coverage can protect business owners from workplace injury lawsuits. Most business owners are protected from lawsuits by employers’ liability insurance, but in places where business owners are required to purchase workers’ compensation from the state, this type of coverage may not be included. The states that require business owners to purchase state-funded coverage are:
- North Dakota
If your state requires you to purchase workers’ compensation insurance from a state fund, you may need to look into stop gap insurance.
Protect Yourself From Lawsuits
If an employee accuses you of not maintaining a safe work environment, stop gap coverage can protect you. Although workers’ compensation will pay for any job-related injury or illness, employers’ liability is usually included in a separate insurance clause. This coverage will prevent you from being held responsible for a worker’s illness or injury.
If you are like most business owners, the idea of facing a lawsuit doesn’t sound very appealing. For this reason, if you live in a state with a monopolistic workers’ compensation insurance system, you must look into stop gap insurance.
Save Money in the Long Run
Stop gap insurance can save your business a significant amount of money in the long run. It can also provide you with peace of mind knowing you are safe from lawsuits.