Stop Gap Coverage
An employers liability endorsement added to the CGL policy for monopolistic state fund states where the state fund provides no Coverage Part B.
What It Is
Stop Gap Coverage is an Employers Liability endorsement added to the Commercial General Liability policy to provide Coverage Part B (Employers Liability) in monopolistic state fund states — Ohio, North Dakota, Washington, and Wyoming. Because the state fund in these jurisdictions provides only statutory workers compensation benefits (Coverage Part A), there is no Employers Liability coverage included.
Without Stop Gap, an employer in a monopolistic state has no protection against employers liability claims such as third-party-over suits, loss of consortium claims, or dual-capacity suits. The CGL policy's standard exclusion for workers compensation and employers liability would normally bar this coverage, so the Stop Gap endorsement creates a specific carve-back.
Stop Gap Coverage mirrors the limits structure of standard Employers Liability — Each Accident, Disease-Policy Limit, and Disease-Each Employee — and can be written at the same limits as Coverage Part B on the standard workers comp form.
Why It Matters for Brokers
Stop Gap is one of the most commonly missed coverages for clients expanding into monopolistic state fund states. Brokers who are unfamiliar with monopolistic states may not realize that the state fund provides no Employers Liability. This gap is invisible until a claim arises — and by then, the employer has no coverage for what could be a six- or seven-figure employers liability claim. Every broker should ask: "Does this client have operations in OH, ND, WA, or WY?" and if yes, confirm Stop Gap is in place.
Real-World Example
A construction company based in Pennsylvania sends crews to a project in Ohio. The broker obtains Ohio workers comp from the Ohio BWC but does not add Stop Gap to the CGL policy. An employee is injured on the Ohio project and receives $140,000 in statutory benefits from the BWC. The injured employee's spouse sues the employer for loss of consortium — a $350,000 claim. The employer has no Coverage Part B from the Ohio BWC (state funds do not provide it) and no Stop Gap on the CGL. The employer must defend and pay the $350,000 claim out of pocket. Stop Gap would have cost approximately $800 per year.
Common Mistakes
- 1Not recognizing that monopolistic state fund states provide only statutory benefits (Part A) with no employers liability (Part B).
- 2Placing workers comp through the state fund without simultaneously adding Stop Gap to the CGL policy.
- 3Not matching Stop Gap limits to the umbrella policy's underlying employers liability requirements.
How brokerageaudit.com Handles This
Policy Checker checks for Stop Gap endorsements on the CGL when the workers comp policy or client profile indicates operations in Ohio, North Dakota, Washington, or Wyoming. It flags any monopolistic state exposure without corresponding Stop Gap coverage. Submission Intake triggers a Stop Gap recommendation when the client's operations include monopolistic state fund states.