When brokers discuss liability with staffing clients, stop gap may not be the first thing to come up. Yet for firms operating in monopolistic workers’ compensation states, it’s one of the most important exposures to address.
In North Dakota, Ohio, Washington, and Wyoming, state-run workers’ compensation programs leave agencies without the employers liability protection found in traditional comp policies. For staffing firms placing workers in high-risk roles, the absence of stop gap insurance coverage can leave clients exposed to negligence lawsuits they never expected.
What Is Stop Gap Insurance?
At its core, stop gap coverage fills the employers liability gap created by monopolistic state workers’ compensation systems. It doesn’t replace workers’ comp; it attaches to a general liability (GL) policy to extend coverage for employer negligence claims, such as allegations of improper training or unsafe placement.
When discussing stop gap with staffing clients, brokers can frame it as the missing piece. General liability protects against third-party claims, and workers’ compensation handles employee injury benefits. But stop gap covers the gray area in between. Without it, staffing agencies in monopolistic states are operating with a blind spot.
Why Must Brokers Address the Stop Gap Exposure in Monopolistic States?
In monopolistic states, workers’ compensation policies are issued only by state funds and do not include employers liability. That point matters because staffing firms often place people in industries where negligence allegations may occur.
Imagine a nurse injured on the job who sues the staffing firm, alleging inadequate training before being assigned to a high-acuity unit. Or consider a driver placed by an agency who’s involved in a crash; Federal Motor Carrier Safety Administration and Department of Transportation rules can amplify liability risk if negligence is claimed against the staffing firm.
In each case, workers’ compensation won’t respond, and general liability excludes it. Only stop gap insurance fills that hole.
How Does Stop Gap Coverage Respond for Staffing Clients?
Stop gap insurance responds when employees bring claims of bodily injury by accident or disease tied to employer negligence. For staffing agencies, this protection is critical because claims often exceed the boundaries of traditional policies.
Coverage typically includes:
- Bodily injury caused by accident or disease when negligence is alleged against the employer
- Defense costs and settlements not picked up by workers’ comp or GL
- Protection for staffing firms in monopolistic states where employers liability is missing entirely
Many staffing firms assume their general liability policy is enough. It’s not. Without stop gap, agencies risk being left unprotected in exactly the types of claims most likely to arise from their placements.
Helping Staffing Clients Stay Protected
For brokers, stop gap is an opportunity to prove their value. In monopolistic states, it’s a necessary layer of protection that complements general liability and workers’ compensation.
World Wide Specialty Programs partners with brokers to make sure staffing accounts don’t carry these hidden exposures. With deep expertise in staffing firm liability insurance, WWSP provides stop gap solutions that integrate with broader liability programs.
The reality is simple: Without stop gap, that nurse’s negligence claim or that driver’s lawsuit could leave a staffing firm dangerously exposed. With it, agencies gain peace of mind and brokers strengthen their role as trusted advisors.
Call us to learn how World Wide Specialty can help you close liability gaps for your staffing clients.
FAQ About Stop Gap Insurance
Do staffing clients still need stop gap if they already have general liability?
Yes. General liability excludes employers liability. In monopolistic states, stop gap must be added for comprehensive protection.
Which staffing clients should agents prioritize stop gap?
Agencies placing workers in higher-risk industries — such as construction, manufacturing, healthcare, or transportation — face the most significant negligence exposures and should make stop gap a top priority.
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.