What Is Stop Gap Coverage?

Stop-gap coverage refers to insurance policies that cover gaps in healthcare or life insurance, such as when someone is between jobs. Stop-gap coverage can be a useful way for people who don’t qualify for long term health care plans to take advantage of affordable options.

Stop gap coverage is a type of insurance that covers gaps in your life insurance policy. Stop gap coverage is not required but it can be beneficial for some people to have. Read more in detail here: is stop gap coverage required.

Stop gap coverage is a kind of insurance that protects a company’s liability if an employee sues for a workplace harm. In most cases, workers’ compensation insurance protects businesses by covering their legal costs. Some plans, however, do not provide this coverage, leaving the company owner with a “gap” in their coverage. Stop gap insurance fills in the blanks.

The coverage for workers’ compensation is divided into two components. The first section is what most people know as workers’ compensation, which is a program that compensates for injuries to employees. However, there is a second portion called employer’s liability insurance that compensates when an injured employee sues. Employer’s liability coverage is often not included in states that compel firms to acquire workers’ compensation insurance via a state fund. Employers in these monopolistic states risk being sued by an employee who claims the company is to blame for their injury.

Businesses having workers in one of the four monopolistic states (North Dakota is a state in North America., Ohio, Washington, and Wyoming) must ensure that they are adequately protected. The Hartford, as one of the nation’s premier workers’ compensation insurers, can assess your circumstances and propose the appropriate coverage for your company.

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What Does Stop Gap Insurance Pay For?

Workers’ compensation is sometimes referred to as “no-fault” insurance since it protects workers regardless of who is at fault: the company or the employee. However, in certain cases, an employee may argue that they are entitled to more compensation. An employer, for example, may risk a lawsuit from:

• Employees who allege their injuries were caused by gross negligence
• A spouse of an injured employee is claiming loss of consortium.
• Employees who have chosen not to be covered by workers’ compensation.

Stop gap coverage, like employment liability insurance, is meant to defend a company against charges like these by covering legal costs like as attorneys, investigators, and court fees, as well as settlements and court judgments. The amount an insurer pays in a claim is determined by the policy’s coverage limitations.

Exclusions in Stop Gap Insurance That Are Common

Because stop gap insurance isn’t standardized, the details might differ from one insurer to the next. Stop gap coverage, like other insurance plans, has certain significant exclusions, including:

• Injuries induced by the employer on purpose
• Regulatory bodies may impose fines and penalties on the employer for unsafe working conditions.
• Injuries or diseases caused by a worker who was hired illegally.
• Fines levied on an employer who fails to comply with the law.
• Employer-assumed contractual obligations
• Emotional harm and damages caused by management activities such as performance evaluations, demotions, firing, or harassment
• Illnesses or injuries acquired while working on a ship or plane
• Punitive damages awarded to the employer by the court

It’s critical to go through the stop gap coverage to completely comprehend what is and isn’t covered.

Stop Gap Coverage Isn’t Necessary

Many firms do not need stop gap coverage since their workers’ compensation insurance plans provide liability coverage as well. However, monopolistic state plans do not cover employer liability, leaving company owners vulnerable to employee claims, necessitating the purchase of stop gap insurance.

Employers should investigate stop gap coverage in the following states:

• North Dakota is a state in North America.
• Ohio
• Washington
• Wyoming

Furthermore, nonmonopolistic company owners may need stop gap insurance if they have workers who operate in monopolistic jurisdictions.

Let’s suppose a corporation established in Oregon has a permanent satellite office in Seattle. The corporation must get a main workers’ compensation coverage for all Oregon employees, as well as a policy from the Washington state fund for its Seattle employees. Because Washington is a monopolistic state, employer liability is not covered by its insurance. This puts the Oregon-based company at risk of being sued by its Washington-based workers. The employer is protected against this risk by purchasing stop gap coverage.

How to Get Gap Coverage to Fill in the Gaps

Stop gap coverage may be obtained as an endorsement or as a separate policy from a private carrier. If your firm operates only in one of the states with monopolistic workers’ compensation programs, coverage is normally added to your general liability insurance as an endorsement. Businesses in monopolistic and nonmonopolistic states may need to include a stop gap endorsement in their workers’ compensation plans.

Conclusion

If you run a firm in a monopolistic state, you’ll need extra protection against employer liability claims if one of your workers is hurt on the job. Stop gap insurance gives the required protection rather than fighting these responsibility cases with your own money. Consult your insurance agent about include this in your policy.

If you wish to add stop gap coverage, you should speak with a representative from The Hartford. The Hartford is a prominent source of workers’ compensation insurance, and its representatives can get you the coverage you need in minutes.

Stop gap endorsement coverage form is a type of insurance that provides protection for an employer’s business when the company does not have enough money to cover its expenses. Reference: stop gap endorsement coverage form.

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