Staffing firms in monopolistic states face a hidden exposure that traditional workers’ compensation doesn’t cover. While state-run systems may meet statutory requirements, they leave out a critical piece: employer liability. That’s where stop gap liability insurance steps in as a vital layer of protection.
For insurance agents serving the staffing sector, recognizing and addressing this gap is key to building stronger, more resilient coverage portfolios.
Understanding Monopolistic Workers’ Compensation States
Most workers’ comp policies nationwide include two parts: statutory benefits and employer liability. But in North Dakota, Ohio, Washington, and Wyoming, coverage must be purchased from state-administered funds, and those funds only provide the statutory portion.
What’s missing is coverage for lawsuits stemming from claims of employer negligence or unsafe working conditions. For staffing firms navigating multiple job sites and work environments, this omission is more than a fine print detail; it’s a real risk.
The Risk of Employer Liability Without Stop Gap Insurance
Monopolistic state funds cover medical bills and lost wages, but they offer no protection if an injured employee sues the employer. Despite exclusive remedy laws, exceptions exist — such as gross negligence or third-party overactions — which can trigger costly legal battles.
This risk becomes even more pressing when you consider how often injuries occur. In fact, U.S. private employers reported 2.6 million nonfatal workplace injuries and illnesses in 2023. While many claims remain within the workers’ comp system, those that escalate into lawsuits can leave staffing firms financially vulnerable.
Stop gap liability insurance addresses this exposure. It picks up where monopolistic state coverage ends, helping pay for legal defense, settlements, and judgments.
How Stop Gap Insurance Fills the Gap
Rather than a standalone policy, stop gap coverage is usually added to a general liability policy by endorsement. It applies to bodily injury by accident or disease, both per employee and in the aggregate.
For staffing firms operating in monopolistic states, this coverage is essential.
World Wide Specialty Programs offers stop gap endorsements tailored to staffing operations in North Dakota, Ohio, Washington, and Wyoming. As long as a qualifying general liability policy is in place, firms can secure stop gap protection that aligns with their broader risk strategy without administrative headaches.
Why Staffing Firms Need This Coverage
Just one uncovered claim can disrupt operations and damage client trust. Between legal costs and potential settlements, the fallout can be huge.
Stop gap liability insurance helps prevent that outcome. It allows staffing firms to operate with confidence, knowing they’re protected against employer liability lawsuits — even in states where standard comp coverage falls short.
Working with a wholesaler that understands the staffing industry, like World Wide Specialty, gives agents and clients a competitive edge. These partners know what to look for and how to act fast when gaps appear.
How Insurance Agents Can Support Staffing Firms
Agents play a vital role in closing this coverage gap. Start by identifying clients with employees or placements in monopolistic states. Then, review whether stop gap coverage is endorsed on their General Liability policy. If not, take steps to address it.
By partnering with staffing-focused wholesalers like World Wide Specialty Programs, agents gain access to policies designed for real-world staffing risks, not just regulatory compliance.
Contact us today to learn how stop gap liability insurance can help shield your staffing clients from employer liability exposure in monopolistic states.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and are committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.