Stop-Loss provides protection against catastrophic or unpredictable losses. Stop-Loss is purchased by employers who self-fund their employee benefit plans such as medical or workman's comp. Under a stop-loss policy, the insurance company becomes liable for losses that exceed certain limits. The stop-loss market protects and insures against not only catastrophic, but any losses above the determined limit. 

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Specific Stop-Loss is the form of excess risk coverage that provides protection for the employer against a high claim on any one individual. This is protection against abnormal severity of a single claim rather than abnormal frequency of claims in total. Specific stop-loss is also known as individual stop-loss.

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Aggregate Stop-Loss provides a ceiling on the dollar amount of eligible expenses that an employer would pay, in total, during a contract period. The carrier reimburses the employer after the end of the contract period for aggregate claims. 

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While the largest employers have sufficient financial reserves to cover virtually any amount of health care costs, most self-insured employers purchase stop-loss insurance to reimburse them for claims above a specified level. 

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Stop-Loss protection can and should be provided through individual Captive Insurance companies. 

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