<P> Stop - loss insurance is insurance that protects insurers against large claims . Stop - loss policies take effect after a certain threshold has been exceeded in claims . </P> <P> Insurance companies themselves, as well as self - insuring employers, purchase stop - loss coverage for a premium to protect themselves . In the case of a participant reaching more than the specific (or "individual") stop - loss deductible ($300,000, for example), the insurer will reimburse the insured (the company, not the participant) for the remainder of the claim to be paid over that deductible amount . </P>

When does an insured qualify for stop-loss coverage