What is stop gap coverage in the context of workers’ compensation?
Workers Compensation - July 15, 2025
What is stop gap coverage for workers’ compensation? It’s designed to be an employer’s liability insurance that protects them from employee lawsuits. If you have suffered a work-related injury or illness or are concerned about your liability as an employer, then you should consult with a Gurnee workers’ compensation lawyer from Horwitz, Horwitz & Associates to determine how to proceed.
What is the purpose of stop gap insurance?
The purpose of stop gap insurance is to protect employers from being sued if an employee suffers workplace injuries. Sometimes, workers’ compensation insurance does not provide general liability protection for business owners or does not provide sufficient compensation for injured workers. In these situations, a stop gap endorsement protects employers from liability risks.
Four states in the U.S. source their workers’ comp benefits from a monopolistic state fund: North Dakota, Ohio, Washington, and Wyoming. Monopolistic state stop gap coverage is a requirement to protect business owners and their companies. Keep in mind that not all states mandate it since other insurance options are available for employers to choose from. Even though it can be beneficial, Illinois does not mandate its use.
Do workers need stop gap insurance in Illinois?
Illinois is not a monopolistic states so this means that employers source their workers’ compensation coverage and business insurance from private companies rather than state coverage. While business owners could use stop gap insurance, the choice is up to them.
Most work injury claims will fall under the provided workers’ compensation benefits, rendering stop gap coverage redundant and unnecessary. In Illinois, employers have the freedom to select from a variety of insurance companies and coverage options to find an appropriate option that best protects themselves and their employees.
What type of coverage is available for employees and employers in Illinois?
Employees and employers are both protected by Illinois laws through workers’ compensation insurance and Employment Practices Liability Insurance, respectively. These policies provide employees with the legal right to recover certain losses from on-the-job injuries, without establishing fault. At the same time, employers have the right to proactively mitigate the risks they could face. Below is a closer look at the scope of both types of insurance coverage.
Workers’ Compensation Insurance
When an employee is injured in the workplace, they can file a claim with the insurance company that administers their workers’ compensation benefits. They must also report their injury to their employer as part of the claim process. Workers’ compensation allows workers to receive payment or compensation for their various medical expenses and lost wages. Employees who have sustained property damage may be able to recover this through workers’ comp benefits or under general liability insurance.
Employment Practices Liability Insurance (EPLI)
Employment Practices Liability Insurance (EPLI) helps protect employers from claims like harassment, wrongful termination, or discrimination, not workplace injury claims. Although it isn’t a replacement for stop gap coverage, it’s a key tool for shielding business owners from other types of employee lawsuits.
Horwitz, Horwitz & Associates helps you navigate workers’ comp insurance after an injury
Our team at Horwitz, Horwitz & Associates helps you navigate the many nuanced aspects of workers’ compensation in Illinois. We understand that this can be a confusing process, and we strive to make it easier on you and get you the best result possible. We do not stop fighting and negotiating on your behalf until we reach a settlement that you are satisfied with.
To talk with one of our experienced workers’ compensation attorneys, call us at (800) 985-1819 or contact us online for your free consultation today.
