Glossary

Stop gap coverage

Employers' liability insurance bought separately where a state fund provides workers' comp but does not insure lawsuits by injured employees or their families.

Also called: stop gap employers liability, stop-gap liability, monopolistic state employers liability

Workers' comp is no-fault and normally the exclusive remedy, but employers still get sued. Spouses claim loss of consortium, third parties sued by an injured worker seek contribution, and some states allow suits over an employer's intentional conduct. On a private policy, Part Two of the NCCI WC 00 00 00 form, employers' liability, responds to those claims. In North Dakota, Ohio, Washington and Wyoming the state fund is the exclusive source of comp, and its policy leaves out employers' liability (Washington Department of Enterprise Services, out-of-state comp FAQs). Stop gap coverage fills that hole.

It is written as an endorsement to a general liability policy or as a standalone policy, often with limits that mirror Part Two: $100,000 each accident, $500,000 disease policy limit and $100,000 disease each employee. Higher limits are available, and umbrella carriers usually expect $1 million underlying, so check what the umbrella schedules.

The common failure is expansion. A contractor with a private comp policy sends a crew into Ohio, finds that other states coverage excludes monopolistic states, buys a state fund policy, and never learns that no employers' liability came with it. Ask about it whenever work crosses into one of the four states. The guide on stop gap coverage in monopolistic states covers the details.

Last reviewed October 10, 2026

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Related terms

Employers' liability The part of a workers' compensation policy covering suits over workplace injuries that fall outside the comp system, such as third-party-over claims. Monopolistic state fund A government-run workers' comp fund that is the exclusive source of coverage in its state; employers buy from it or self-insure, not from private carriers. Workers' compensation State-mandated no-fault insurance that pays medical care and part of lost wages for work-related injuries, in exchange for limits on employee lawsuits. Other states coverage Workers' comp protection in Part Three of the standard policy that can apply in a state not listed in Item 3.A when you begin work there during the policy term. Umbrella policy A liability policy that adds limits above underlying general liability, auto and employers' liability policies and may cover some claims they do not.

Related guides

Employers' liability insurance (Part Two) What Part Two of the workers' comp policy covers, its standard 100/500/100 limits, key exclusions, the umbrella link and stop gap in monopolistic states. Monopolistic state funds: workers' comp in ND, OH, WA and WY How workers' comp works in the four states where private insurers cannot sell it: the mandate, self-insurance rules, premiums and the separate stop gap need. Employees in several states: other-states coverage and multistate workers' comp How Items 3.A and 3.C of the NCCI policy, extraterritorial rules and state payroll allocation decide which comp law covers staff who work in several states. Stop gap coverage in monopolistic states Why a state fund policy leaves employers' liability uncovered in OH, WA, ND and WY, what stop gap endorsements add, and how to check limits and exclusions. Texas nonsubscribers: opting out of workers' comp Texas lets most private employers go without workers' comp. What nonsubscribers must file, which defenses they lose in a lawsuit and what TDI data shows. Workers' comp requirements by state: who must carry it Comp thresholds, owner exemptions, monopolistic states, the Texas opt-out and penalties for going uninsured, with a table covering all 50 states and DC.

Related insurers

Core Specialty Cincinnati specialty insurer built from StarStone U.S. in 2020; writes E&S and admitted casualty, property, Lancer auto, comp and bonds via brokers. COUNTRY Financial Bloomington, Illinois insurer founded by farmers in 1925; sells farm, small business and workers' comp coverage through its own reps in 19 states.