Stop Gap Insurance

What Is the Meaning of Stop Gap Insurance?

Business owners require multiple types of insurance to protect themselves from financial risks. One of the policies available is known as a stop gap endorsement, available from companies such as Here is the meaning of this type of policy, what it covers, and who needs it.

What It Covers

Stop gap insurance pays for some legal costs when workers get hurt on the job. Although workers’ compensation covers medical bills, an additional stop gap insurance policy pays for court fees and representation whenever an employee claims that unsafe working conditions caused his injury. Even if the claim is false, the expenses of defending your company’s reputation can be enormous.

Who Needs It

To determine whether your business would benefit from stop gap insurance, check with your insurance company to determine if claims of hazardous working conditions are covered under your workers’ compensation policy. In many cases, employer’s liability is included; however, in the following so-called monopolistic states it is not:

  • North Dakota
  • Ohio
  • Washington
  • Wyoming

For many companies, especially those doing business in states that require employers to purchase workers’ compensation insurance from a state fund,  investing in stop gap insurance is worthwhile. Talk to your insurance agent about whether this type of policy is right for you and your employees.