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Everything Small Businesses Need to Know About Stop Gap Coverage

For small businesses, the financial year is a big deal. You get to see how much money you’ve made and decide if it was enough to cover your expenses for the next 12 months. But what happens if you don’t make enough money? What about unexpected expenses like damage from a fire or flood that can’t be covered with your current insurance policy? In this article, we’ll look at stop gap coverage and why it could be essential for small businesses with limited resources.

What Is Stop Gap Insurance?

Stop gap insurance is a short-term insurance policy that protects gaps in coverage between two policies or during the waiting period before purchasing a new one. The stop gap policy is designed to bridge this gap until the new coverage begins, and it’s meant only as a temporary solution.

Stop gap insurance can be purchased as one of two types: an endorsement or an extra premium rider (EPR). An endorsement will attach itself to your existing policy, extending its coverage for however long it will take for you to purchase your next policy. An EPR is similar in that it extends existing coverage but does so by adding another layer on top of your current plan rather than replacing it completely.

Who Qualifies for Stop Gap Insurance?

Stop gap insurance is for small businesses with less than 50 employees and less than $50 million in annual revenue. Stop gap insurance plans are unavailable to larger groups or companies that are part of a large group health plan.

Stop gap insurance plans can be purchased by any business owner who wishes to cover their employees’ health care expenses until they can find an appropriate alternative plan on their behalf or through their employer’s benefits package.

How Does Stop Gap Insurance Work?

Stop gap insurance is a short-term insurance policy that protects your business if you cannot secure the coverage you need. For example, if you have a gap between when your current workers’ compensation policy ends and when the new one begins, stop gap coverage can fill in this gap so that you have some protection against accidents or injuries.

While stop gap policies provide limited protection compared with traditional policies, they do offer affordable rates and will protect businesses from major losses if an accident occurs during their coverage period. Small businesses need to understand how these policies work to find ways to make them work best for their individual needs.

How Much Does Stop Gap Insurance Cost?

The cost of stop gap insurance varies depending on your company’s size and the coverage you choose. For example, if you’re a small business with fewer than ten employees, most stopgap insurance providers will charge around $2 per employee per month or $240 per year. If you have between 10 and 50 employees, this cost increases slightly to about $3 per employee per month or about $360 annually.

Whether or not it’s worth it depends on how much money is being saved by using this service instead of hiring someone new. In many cases, though, especially during times like these when unemployment is low, it can make sense to hire someone rather than pay for an additional service like stop gap insurance.

Benefits of Stop Gap Coverage for Small Businesses

Stop gap coverage is affordable for small businesses to attract top talent, protect their business and employees, and help them get back on their feet after a disaster. Most small business owners say employee retention is one of their biggest concerns. Stop gap coverage can help keep employees by providing them with temporary health insurance while waiting for COBRA or other benefits they have earned through their job.

Stop gap coverage also provides valuable peace of mind knowing that if something catastrophic happens at home or office. Whether it is fire damage caused by a faulty connection between two wires in an electrical panel, water damage from broken pipes caused by a winter storm, or hurricane Michael hitting Florida’s panhandle, you will be able to recover financially as quickly as possible. You can focus on getting back on your feet instead of worrying about whether or not you’ll be able to pay off the costs associated with rebuilding or repairing any damaged property.

Stop gap insurance protects businesses and their employees when they most need help recovering from unexpected disasters like those mentioned above (but also floods). When there are unexpected events such as these—or even if it’s not as major—this extra layer of protection allows both parties to focus more clearly on getting back into operation mode, rather than worrying about what other financial obstacles might arise down the road due to long-term losses incurred during natural disasters such as these.

Stop Gap Coverage Is an Affordable Way for Small Businesses to Attract Top Talent

If you’re a small business owner, you know that hiring top talent is a challenge. It will help if you offer competitive salaries and benefits to attract the best candidates for your open positions. However, many companies find it difficult to afford these benefits independently.

Stop gap coverage is an affordable way for small businesses to attract top talent and protect their business from injuries that could impact their bottom line or even shut down operations completely. Stop gap coverage protects from accidents during work hours, so employees don’t have any out-of-pocket costs for medical bills or lost wages if they miss work due to an injury suffered at work.


When it comes to running a small business, there are many challenges. One of the biggest challenges is managing cash flow. If you have ever been in a situation where your business needs funding to pay bills but cannot get a loan, stop gap coverage may be right for you.

In conclusion, stop gap insurance can be an attractive option for small businesses that need extra money to cover expenses or other operational costs when they cannot obtain traditional financing solutions such as loans or lines of credit.