Business Insurance
Monopolistic State Fund
In monopolistic fund states, all employers must buy workers compensation exclusively from the state government rather than from private insurance companies.
Last reviewed: May 2026 · Editorial methodology
Definition
Monopolistic state funds are state government-run workers compensation programs that are the exclusive provider of workers comp coverage in their jurisdiction — private insurers are prohibited from selling workers comp within those states. As of 2026, the monopolistic fund states are North Dakota, Ohio, Washington, and Wyoming (plus U.S. territories Puerto Rico and the U.S. Virgin Islands). Employers in these states pay premiums directly to the state fund based on class codes and payroll, and the fund administers all claims. A critical gap for businesses in monopolistic fund states is employers liability coverage — because the state fund provides only workers comp benefits, employers must purchase a standalone stop-gap employers liability policy from a private insurer to cover civil claims that fall outside the exclusive remedy doctrine. Multistate employers with operations in both monopolistic and competitive-fund states must coordinate coverage carefully to avoid gaps; their private workers comp policy typically adds a stop-gap endorsement for monopolistic state operations. Premium rates, dividend programs, and claims services vary significantly between state funds, with some offering competitive pricing and others lagging private market carriers.
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Cover Forge USA Editorial Team
Editorial Lead
This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.
Reviewed 2026-06-14
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