As a business owner, you want to make sure that your employees are taken care of if anything should happen to them while they are working. To help them, you probably have standard Workers Compensation insurance. Unfortunately, sometimes, specific Workers Compensation insurance policies can contain exclusions and gaps. This is where Gap insurance comes in, and you may have heard the term when purchasing a new car or Commercial Auto insurance.
With Workers Compensation, this type of extra protection is called Stop Gap and is used to provide coverage for lawsuits that arise from workplace injuries. Slips, falls, machinery accidents and illness are just some of the things that can happen, regardless of your risk management. Often, Stop Gap insurance is included in your Workers Compensation insurance policy, except in some states that have strict requirements. As always, be sure to carefully read your policy and work with your agent to determine if you need to purchase a separate policy from private insurers.
If you live in one of the states mentioned that requires you to purchase your Workers Compensation coverage through the state fund, your business will need the extra protection of a Stop Gap insurance policy. You probably will not be able to add it to your Workers Compensation policy and will have to look to your General Liability insurance policy where this coverage can be added. Employers' Liability is the name of this endorsement and a significant protector of your business.
A Stop Gap insurance policy is designed to protect you, the employer. If an employee becomes sick or injured and decides to sue you, which let's face it, is more likely to happen these days, your General Liability insurance policy will not cover it. You will need to look to your Workers Compensation policy or Stop Gap insurance to cover this type of claim. Protect your business and wallet by making sure you have this critical coverage.
Monopolistic states do not automatically provide Employers' Liability insurance within their Workers Compensation insurance policies. When researching Stop Gap insurance always be sure to check with your specific state, as things change often. As of this writing, the states that must have it include North Dakota, Ohio, Puerto Rico, Washington, Wyoming, and the U.S. Virgin Islands. The mandate is because those states require businesses to purchase their monopolistic state-funded Workers Compensation policies, which have a considerable gap, leaving business owners with significant exposure. If you have a business in any of these states, be sure to discuss Stop Gap insurance with your agent.
As a business owner, you have to keep your income flowing and your employees happy. Stop Gap insurance can help you continue to do this should a workplace injury or illness occur. If an employee thinks that you were negligent and caused them harm, the chance that they will sue you is almost guaranteed. The benefit of Stop Gap coverage is that you won't have to endure a major lawsuit on your own.