Employers Liability: Stop Gap

A gap exists in employers liability insurance coverage for an employer who has operations in a monopolistic state fund state. There are ways to stop or “fill” the gap.


Employers Liability Coverage Endorsement (WC000303), and Ohio Employers Liability Coverage Endorsement (WC340301)

Monopolistic state funds do not provide employers liability coverage. So, with stop gap coverage, an employer whose only exposure in a monopolistic fund state is only necessary and incidental to their work in other states (like Indiana), would have employers liability coverage automatically apply in the monopolistic fund state from their employers liability coverage in the other state(s).

Stop Gap relates to the situation (gap in coverage) that exists when an employer has operations in a monopolistic state and purchases the required coverage from the state fund. The state fund is providing statutory workers compensation insurance coverage, but is not providing employers liability insurance coverage.

Therefore, the coverage provided by a state fund in a monopolistic jurisdiction does not apply to injuries that are not covered by the workers compensation law of that state. Further, the employers liability portion of the employer’s standard workers compensation policy it may have for other state(s) will not respond because the employment in the monopolistic state is not necessary or incidental to the employer’s operations in the other state(s). Therein lies the “gap”. Stop Gap refers to filling that gap.

The Employers Liability Coverage Endorsement, WC 00 03 03, can be used to fill this gap. A state special endorsement, WC 34 03 01 was created for such exposures in Ohio. If the only WC policy for an employer is from a monopolistic state, than Stop Gap (if provided) typically would be included on a carrier’s General Liability (GL) policy for that employer.

Premium Charge

The Indiana Workers Compensation Premium Algorithm indicates that a premium charge for this coverage is part of subject premium and is reported under statistical code 9139.

ICRB does not file a rate or flat fee for this coverage, so a carrier must make its own filing. The premium algorithm shows that there is a flat charge for this coverage.

Not Available in the Assigned Risk Market

The NCCI Assigned Risk Supplement, both on page PLAN-18, Item 15, Coverages Available Under Plans, and Appendix-1, Additional Coverages Available, does not address Employers Liability Coverage Endorsement (WC000303), for employers liability exposure in a monopolistic state. This coverage is typically known as “stop gap” coverage.

Because this potential additional coverage is not specifically listed as being available, then one would conclude such stop gap coverage is not available.

Further, the stop gap coverage provided via the Employers Liability Coverage Endorsement would not be considered part of the general category of coverage contemplated under Employers Liability (Part Two), which is available at standard limits and increased limits in most jurisdictions.