Stop gap insurance is essential for staffing firms operating in monopolistic workers’ compensation states. In North Dakota, Ohio, Washington, and Wyoming, employers must purchase workers’ compensation through the state fund. While those policies provide statutory benefits, they do not include employers liability coverage.
For staffing firms, that omission creates exposure. If an injured employee files a claim outside the workers’ compensation system, the state fund does not respond to civil liability. Stop gap insurance fills that employers liability gap.
However, stop gap insurance does not stand alone. It is typically written in conjunction with a general liability policy, which supports and complements the coverage. Proper placement requires understanding how these policies work together — especially in the staffing environment, where temporary workers and multi-state operations can complicate risk.
Why Is Stop Gap Insurance Essential?
Monopolistic workers’ compensation states exclude part-two employers liability from their policies. As a result, staffing firms may face exposure if an employee brings a civil action that falls outside exclusive remedy protections.
For example, an injured temporary employee may allege unsafe supervision or negligent worksite practices. Workers’ compensation continues to pay statutory benefits, regardless of fault. However, if a claim proceeds as a civil action for work-related bodily injury by accident or disease, stop gap liability may respond, subject to policy terms and exclusions.
Staffing firms face elevated exposure because they place employees in varied environments every day. Federal data shows that thousands of American workers suffer workplace injuries annually, underscoring how frequently injury-related claims can arise. In staffing operations, injuries may involve client premises, equipment, or supervision responsibilities. Without stop gap insurance, that civil liability exposure may not be insured.
For staffing agents, this coverage restores employers liability protection that would otherwise exist in non-monopolistic states. In practical terms, stop gap insurance protects staffing clients where state systems leave employers liability unaddressed.
Stop Gap Coverage Requires General Liability
Stop gap insurance is not written on a monoline basis. Instead, it’s typically structured in conjunction with an existing general liability policy.
This requirement exists because stop gap liability mirrors the employers liability protection found in standard workers’ compensation policies issued in nonmonopolistic states. It integrates into the broader liability framework rather than standing alone.
Consider a staffing firm operating in Ohio. An employee suffers a serious workplace injury and later files a negligence lawsuit outside exclusive remedy protections. If the firm purchased only state fund workers’ compensation, no employers liability coverage would apply. Without stop gap written alongside general liability, the firm could face uncovered defense costs and damages.
Therefore, agents must confirm that a general liability policy is in place before placing stop gap insurance.
Key Coverage Features Agents Must Know
Understanding limits is critical when structuring stop gap liability. Coverage typically includes bodily injury by accident on a per-accident basis. It also includes bodily injury by disease on both a per-employee and aggregate basis. These limits parallel traditional employers liability structures.
However, insufficient limits can leave staffing firms financially exposed. Agents should evaluate payroll size, employee classifications, and contractual obligations carefully when determining appropriate limits.
Staffing-focused stop gap programs are available for North Dakota, Ohio, Washington, and Wyoming. When structured correctly alongside general liability, placement becomes more predictable, and coverage gaps become easier to manage.
Agent Placement Tips
Before binding stop gap insurance, agents should conduct a focused review:
- Verify the client maintains an active general liability policy.
- Confirm operations occur in a monopolistic workers’ compensation state.
- Assess employee exposure to workplace injury or occupational disease claims.
- Ensure coverage limits align with staffing operations and client requirements.
This disciplined approach helps prevent underinsurance and structural placement errors.
Protect Staffing Firms With Stop Gap
Stop gap insurance is a critical complement, not a standalone product. In monopolistic states, it restores employers liability protection that state systems don’t provide.
For staffing firms in North Dakota, Ohio, Washington, or Wyoming, the exposure is real. Agents who understand how stop gap liability integrates with general liability can help protect clients more effectively.
Partner with World Wide Specialty Programs to structure stop gap insurance that supports staffing firms where state systems leave employers liability gaps.
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.