Insurance glossary · Workers’ comp and audits
monopolistic state fund.
In a monopolistic state, workers’ comp can only be bought from the state’s own fund, not from private insurers. Employer’s liability then has to be arranged separately.
Which states are monopolistic for workers’ comp?
North Dakota, Ohio, Washington and Wyoming. In those states, workers’ comp has to come from the state’s own fund, not from a private insurance company. Ohio and Washington allow some large employers to self-insure instead.
What does monopolistic mean for a business with workers there?
You buy comp for those workers directly from the state fund. A private workers’ comp policy, even one listing other states, doesn’t cover employees in a monopolistic state.
What is stop gap coverage?
It’s employer’s liability coverage for monopolistic states. State funds generally provide workers’ comp benefits but not the employer’s liability part a private policy includes, which covers lawsuits by employees or others over a workplace injury. Stop gap fills that gap, often as an endorsement on your general liability policy.
What if my business is based elsewhere but sends crews to a monopolistic state?
Those workers generally need coverage from that state’s fund, and the “other states” section of a private policy doesn’t extend to monopolistic states. Planning before the job starts avoids a gap.
Do owners have to be covered in a monopolistic state?
Rules vary, but owners in these states generally get coverage only by electing it with the state fund. There’s no private ghost policy market there.
How are rates and experience mods set in a monopolistic state?
By the state fund itself, using its own classifications and experience rating rather than a private rating bureau. Ohio, for example, offers group rating programs through the fund.
Can a general contractor require a waiver of subrogation in a monopolistic state?
It can ask, but the usual waiver endorsement isn’t available from the state fund in most of these states, so contracts written for private-market states can be impossible to meet as written. The waiver of subrogation page covers the details.
every other state.
How it works everywhere else, with the rule each line comes from. Riza is not licensed in these states.
- North Dakotastate fundNorth Dakota’s workers’ comp comes only from Workforce Safety and Insurance, which provides no employer’s liability coverage, including on its coverage for temporary work out of state, so employers buy stop gap from a private insurer.N.D.C.C. ch. 65-01 · WSI, all states coverage
- Ohiostate fundOhio employers pay into the state insurance fund run by the Bureau of Workers’ Compensation or qualify to self-insure, private comp contracts are void, and Ohio law also voids coverage for an employer’s willful acts, which limits what Ohio stop gap can cover.Ohio Rev. Code § 4123.35 · Ohio Rev. Code § 4123.82
- Washingtonstate fundWashington workers must be covered by the state fund run by the Department of Labor and Industries or by a certified self-insured employer, and the state fund has no employer’s liability part, so employers buy stop gap privately.Washington L&I, employers’ guide to workers’ comp · RCW 51.14.010
- Wyomingstate fundWyoming’s workers’ comp is written only by the state’s Workers’ Compensation Division, which sets classes and rates, and employer’s liability comes from private stop gap coverage.Wyoming Statutes Title 27 · Wyoming DWS, workers’ comp for employers
by trade.
- General contractorsProjects in a monopolistic state need comp from that state’s fund for your crews there, plus stop gap employer’s liability.
- HVACService and installation crews that cross into a monopolistic state need coverage from that state’s fund before they start.
- ElectricalElectrical contractors following multistate clients into these states need the fund coverage and stop gap lined up in advance.
where you’ll see it.
- Your workers’ comp policyItem 3.C “other states” wording that excludes monopolistic states.
- General liability endorsementsA “stop gap” or “employer’s liability for monopolistic states” endorsement.
- ContractsComp and waiver requirements written for private-market states.
no gap when you cross the state line.
When your work reaches a monopolistic state, Riza helps you set up the state fund account and adds stop gap employer’s liability so your coverage matches what you have everywhere else.
Get a quoterelated terms.
Coverage it touches: Workers’ comp