Workers Comp in Washington: L&I, Stop-Gap and What Employers Need to Know

Washington is a monopolistic workers compensation state. Most employers must get workers comp through the Department of Labor and Industries (L&I), not a private insurance company. L&I covers injured workers’ medical bills and lost wages, but it does not include employers liability coverage, which is why Washington businesses buy stop-gap.

How L&I workers comp works

Employers report employee hours and pay premiums to L&I, usually quarterly. Rates depend on the risk class for the type of work and the employer’s experience factor, which reflects past claims. Employees also contribute a portion through payroll deductions.

What stop-gap covers

Washington’s workers comp system generally protects employers from being sued by injured employees, but there are exceptions. Stop-gap employers liability helps defend and pay claims such as:

• Allegations that the employer deliberately intended to injure a worker
• Third-party-over actions, where an injured employee sues another company that then seeks recovery from you
• Certain claims by family members of an injured worker

Where to get stop-gap

Stop-gap is usually added to your general liability or business owners policy. Many contracts, especially in construction, require it. If you have employees in other states, coverage there needs separate attention.

Owners and officers

Sole proprietors, partners and some corporate officers are not automatically covered by L&I and may be able to elect coverage. Whether that makes sense depends on your situation.

Read more on our workers comp and stop-gap page or call (425) 555-0100 to review your business coverage.