Stop gap coverage in monopolistic states
What is stop gap coverage and why is it important?
Most states require most small businesses with employees to carry workers' compensation insurance, which provides employee benefits if a worker is injured or falls ill while on the job.
Workers' compensation pays medical bills, disability benefits, and time off for recovery and rehabilitation for injured employees. Most U.S. business owners can purchase this policy from a private insurance provider.
However, there are four states where businesses are required to purchase insurance policies from a monopolistic state fund:
Private insurance typically includes employer's liability insurance in a standard workers' comp policy, which helps protect employers in the event that an employee sues over their workplace injuries.
In monopolistic states, the state fund does not include employer's liability coverage, leaving small business owners vulnerable in the event of an employee injury lawsuit.
To avoid having to pay out-of-pocket for a lawsuit, many employers opt to purchase stop gap insurance from a private insurance company.
Find workers' comp requirements in your state
How to get a stop gap coverage endorsement
Employer's liability coverage protects your business against court cases and defense costs arising from employee injuries.
Private insurance providers typically include employer's liability in a standard workers' comp policy, but state fund plans do not. If you need to purchase the coverage necessary to protect your business from lawsuits related to employee injuries, you should purchase a stop gap policy.
Small business owners often add this coverage as a stop gap endorsement to a general liability insurance policy.
You can contact a licensed TechInsurance agent if you would like to purchase stop gap insurance coverage for your business.
How do I get affordable workers’ comp insurance in monopolistic states
Implement employee training
Providing training and safety programs for your employees can help lower your premium rates and prevent workers' compensation claims.
Regular training ensures your employees stay safe and work with compliance and risk in mind, helping reduce work-related injuries.
Establish safety measures and practices
Risk management protocols can help prevent workplace injury claims and the medical expenses that come with accidents and bodily injuries for you or your employees.
Some safety procedures you can engage in include:
- Performing safety audits and walkthroughs of the work environment
- Providing ergonomic equipment for staff
- Stocking safety gear and protective equipment
- Repairing property damage promptly to avoid injury
- Properly storing and labeling hazards and dangerous chemicals
- Regularly maintaining machines and equipment
Hire on-site medical staff
Larger companies with lots of employees should consider hiring an on-site RN case manager. A registered nurse can oversee workers' comp cases and reduce state workers' compensation costs.
Find workers' compensation insurance for small businesses
Get the insurance solutions your small business needs with TechInsurance. Fill out our application today to get free quotes and find the right stop gap insurance coverage for your business.
Our licensed insurance agents are available to answer your questions, whether you're in a monopolistic or non-monopolistic state.
With TechInsurance, you can easily download a certificate of insurance for your small business, often on the same day you buy workers' compensation insurance coverage or other types of insurance products.
This comes in handy for companies that need proof of insurance to sign a contract or a lease. Clients may ask for a certificate of workers' compensation insurance or other types of business insurance to show you’re insured.
Hear from customers like you who purchased workers' compensation coverage.
