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Stop-loss reinsurance is non-proportional coverage that protects insurers when aggregate annual losses exceed a specified level. It stabilizes loss ratios and results. Treaty reinsurance covers classes of risks, facultative applies to individual risks, and direct insurance remains necessary for policyholders.

Employers Liability protects against suits outside workers comp, including family member claims and certain negligence allegations. However, contractual liability assumptions are excluded unless the contract is specifically covered. Occupational diseases tied to work are generally included under statutory workers comp, not excluded. This reinforces the policy’s function as a complement to workers comp, not a replacement.

Forgery or Alteration coverage reimburses losses from forged or altered checks, drafts, or promissory notes drawn against the business. It specifically targets fraudulent instruments executed by outsiders, whereas Employee Theft focuses on internal dishonesty. Funds Transfer Fraud and Computer Fraud address electronic crimes. With paper-based fraud still prevalent, this coverage remains vital for safeguarding company finances.

Aggregate stop-loss reinsurance, a form of non-proportional coverage, limits the insurer’s total losses during a policy year to a specified amount. Once exceeded, the reinsurer reimburses additional losses. This protects insurers from unexpectedly high loss ratios, stabilizing results. Facultative and quota-share address individual risks or proportional sharing, not aggregate protections.

Excess-of-loss reinsurance provides coverage once a single claim or event exceeds a retention amount. It protects insurers from catastrophes like hurricanes or earthquakes. Quota-share and facultative reinsurance spread ordinary risks, while stop-loss reinsures aggregate annual results. Excess-of-loss is critical for solvency protection against severe, unpredictable events.