Business Term 101: Stop Loss Underwriting

Sitting in on a business meeting is very beneficial, especially if you want to learn the ropes and be able to successfully put up your own business. However, it can prove to be confusing, too, especially when you start hearing jargons or terms which are specifically used for and by businessmen. You feel as if you were thrust in the midst of a battle without any weapons – helpless.

No, I haven’t sat in on a business meeting in a while. But I experienced it in the past, and one particular business phrase that struck me was stop loss underwriting. What is it? Well, it’s something that companies, businessmen or employers should look into. It’s the one thing that could save them in case they become liable for any harm, sickness or injury that may befall one of their employees.

It goes without saying that all businesses are insured. You cannot operate one without the other. It guarantees not only the protection of a business itself but also the interests of employees. However, an insurance company can only cover so much. So that means the rest of the expenses will have to be self-funded by a company or business organization. Stop loss enters the picture when the expenses incurred during an accident or illness goes beyond what the company can cover. Hence, companies are able to do away with a third party insurer; thus, operational expenses are cut, sometimes in half, without depriving employees of their benefits.

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