The short version
- What it is: employers liability insurance for employers in states where workers comp is sold only by the state. It pays defense costs and damages when an employee's workplace injury turns into a lawsuit against the business.
- Why Washington needs it: Washington is one of four monopolistic states, along with North Dakota, Ohio, and Wyoming. Workers comp comes from L&I (or approved self-insurance), and L&I coverage does not include employers liability. In most other states, employers liability is Part Two of the workers comp policy.
- Employers can still be pulled into lawsuits: an employee can sue for injuries the employer deliberately intended (RCW 51.24.020), and when an injured employee sues a general contractor or property owner, that party can demand indemnity from the employer if the employer waived its immunity in a negotiated construction or motor carrier indemnity agreement (RCW 4.24.115).
- Who needs it: every Washington employer with employees. Contractors, trucking companies, and any business with a commercial umbrella need it most.
- How it is bought: as an endorsement to a general liability or business owners policy, or as a separate policy. L&I does not sell it.
Why Washington's workers comp leaves a gap
| Most states | Washington | |
|---|---|---|
| Who sells workers comp | Private insurers, often a state fund too | Only the state, through L&I, unless the employer qualifies to self-insure |
| Part One: benefits to injured workers | In the workers comp policy | Provided by L&I |
| Part Two: employers liability | In the same workers comp policy | Not included; bought privately as stop-gap |
L&I coverage is no-fault insurance that pays medical care and wage replacement to injured workers. In exchange, RCW 51.04.010 abolishes most civil lawsuits for workplace injuries. That immunity is broad but not complete, and the exceptions are what stop-gap is for.
When a Washington employer can still be sued or held liable
| Route | What the law says | Source |
|---|---|---|
| Deliberate intention | A worker injured by the employer's deliberate intention may sue for damages beyond L&I benefits. Courts read this to mean the employer had actual knowledge that injury was certain to occur and willfully disregarded that knowledge. | RCW 51.24.020; Birklid v. Boeing (1995) |
| Contractual waiver | In construction, architecture, engineering, land surveying, and motor carrier contracts, an employer can agree to indemnify the other party for its own employees' injuries, giving up its immunity for that purpose, but only if the agreement specifically and expressly provides for it and the waiver was mutually negotiated. | RCW 4.24.115 |
| Third-party over action | An injured employee sues the general contractor or property owner, who then demands indemnity from the employer under a waiver like the one above. | RCW 4.24.115; Brown v. Prime Construction (1984) |
Even a lawsuit the business wins costs money to defend. Stop-gap pays the defense as well as any settlement or judgment it covers.
What stop-gap covers and what it does not
| Covered | Not covered |
|---|---|
| Employee injury lawsuits that fall outside L&I immunity | Medical bills and wage replacement, which L&I pays |
| Defense costs for those suits | Employment practices claims such as discrimination, harassment, or wrongful termination (that is EPLI) |
| Liability for employee injuries assumed under a contract, when the policy includes it | Workers comp benefits for employees working in other states (that needs a workers comp policy for that state) |
| Claims by an injured worker's family in the narrow cases Washington law allows them, such as a deliberate-intention suit, when the policy covers them | Fines and penalties |
If you sign subcontracts with an immunity waiver, confirm your stop-gap covers liability assumed under contract. Some forms limit it.
Who needs stop-gap
- Every Washington employer with employees. No law requires it, but the exposure exists as soon as you have staff covered by L&I.
- Contractors and subcontractors. Construction subcontracts often include indemnity clauses that address the Title 51 waiver, and general contractors commonly require stop-gap on the certificate of insurance. See general contractors.
- Trucking and motor carriers, whose transportation contracts can include the same kind of waiver.
- Any business with a commercial umbrella. Most umbrellas list employers liability as required underlying coverage. See the Washington stop-gap gap.
- Employers in the other monopolistic states. North Dakota, Ohio, and Wyoming employers face the same gap. Idaho is not one of them: employers liability comes with the Idaho workers comp policy. See Idaho workers compensation.
How much stop-gap costs
Insurers price stop-gap from:
- Payroll, usually your Washington payroll by type of work
- Industry hazard, with roofing, logging, and manufacturing priced higher than offices
- The limits you choose, often matched to a contract or your umbrella
- Claims history
- Whether it is endorsed to your general liability policy or written separately
We quote it with the rest of your program, so the limit matches what your contracts and umbrella actually require.
How to add stop-gap
- Check what you already have. Look on your general liability or business owners policy for a Washington stop-gap or employers liability endorsement.
- Find the limits you need. Read the insurance section of your contracts and the schedule of underlying insurance on your umbrella. Employers liability limits come in three parts: each accident, disease per employee, and disease policy limit.
- Add it. Most insurers add stop-gap to a general liability or business owners policy by endorsement. Some write it separately or with an umbrella.
- Cover other states. If employees work in Oregon, Idaho, or elsewhere, workers comp for that state may be needed too, and it includes its own employers liability.
Contracts and umbrellas that require stop-gap
| Who asks | What they usually want |
|---|---|
| General contractors | Stop-gap shown on the certificate of insurance, at a stated limit |
| Property owners and managers | Employers liability alongside general liability for vendors on site |
| Your commercial umbrella | Employers liability on the schedule of underlying insurance, at the scheduled limit |
| Public agencies and large customers | Employers liability limits written into the contract's insurance requirements |
A common problem is a mismatch: the umbrella schedules $1 million of employers liability while the stop-gap endorsement carries a lower limit, or no stop-gap at all. The difference is uninsured.
Stop-gap in practice
Illustrative stories (composites, not real clients) of how stop-gap comes up: