Stop Gap has a specific meaning when it comes to Workers Compensation. Does your insured need Stop Gap?

Workers Compensation is available in most states from commercial insurance carriers. In just 4 states, WC must be purchased from a state agency, known as a monopolistic state fund. Other insurance carriers are not permitted to write coverage in these states: North Dakota, Ohio, Washington, Wyoming.

If you or your insured is headquartered in that state, you are already well familiar with this fact. If your insured is located in another state, but has one or more employees in a monopolistic state, you may be called upon to assist your client in the process of purchasing through the state.

But the obligation doesn’t end there. Remember that in the remaining 46 states, there are 2 parts to a Workers Compensation policy. Most often, we refer to the Workers Compensation part. The other part is Employers Liability, and WC policies sold by state funds do not include this coverage part.

Now there is a gap in coverage. How can this be remedied? Stop Gap is literally in the name of the coverage and in the coverage forms. Stop Gap should be added to the General Liability policy. By the addition of a form and collection of additional premium, Employers Liability coverage is added to the GL. The premium is often a few hundred dollars or less.

And the Umbrella, as is usual, is addressed last. Don’t forget to schedule the EL coverage on the Umbrella. Although EL is found on the GL policy, the Umbrella might schedule only “General Liability” for the policy number. Be sure UW adds EL to that schedule.

What does Employers Liability cover? Look for that post next week.