Every state has its own workers’ compensation laws with unique standards and requirements. In most states, these laws mandate that employers must purchase an insurance policy to cover the medical costs associated with injured employees. Workers’ comp policies offer this coverage as well as coverage for disability benefits, wage replacement, and death benefits. Indeed, a comprehensive workers’ comp policy can provide liberal coverage, but there are still certain liabilities that may be left uncovered. Among these is an employer’s liability for legal action that may follow a worker injury. If your workers’ comp coverage doesn’t include this, it’s time to consider investing in stop gap insurance.
Determine What Your Insurance Covers
How do you know who needs stop gap coverage — and whether or not you might need it? To answer this question, you should first assess what your insurance covers. Some workers’ comp policies include coverage for the expenses of legal action — including potential settlements — that may follow an on-the-job injury. Others, however, may not. To find out what’s covered in your workers’ comp policy, review the summary of benefits that should be included in its documents. There, you’ll find an overview of coverage, and you can see whether legal action against an employer is covered. If not, you may need to expand your coverage or find a stop gap policy.
Check Whether You Live in a Monopolistic State
It’s important to note that there are some states — North Dakota, Washington, Ohio, and Wyoming — that are considered monopolistic. This means that these states manage a fund that is dedicated to workers’ compensation, and insurance can only be purchased through the state’s workers’ comp coverage program. These state-serviced workers’ comp policies do not cover employer liability the way that a privately-provided policy typically would — and thus the necessity for stop gap insurance emerges. Is stop gap coverage required in these states? It may be mandatory in your state, but regardless of whether it’s required, it’s a wise business investment.
Identify Your Company’s Liabilities
If you happen to live in one of the aforementioned no-fault states, you could likely benefit from investing in a stop gap policy. Stop gap coverage can cover the exposures that are left by workers’ comp policies offered by the state, minimizing the risk of financial fallout from a workplace injury. As you’re considering stop gap insurance, you should research the liabilities that you face. Some monopolistic states, such as Washington, are also no-fault states. In such cases, injured workers are not permitted to directly sue their employer, so stop gap insurance would cover a liability that doesn’t exist. In such cases, claims may be filed directly with the state, which will typically mediate an agreement between an employer and an injured worker.
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 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.