Insurance companies themselves, as well as self-insuring employers, purchase stop-loss coverage for a premium to protect themselves.
Insurance companies and health and benefits consultants typically use mathematical models analyzing historical claims data to project expected stop loss premiums into the future to control for stop loss coverage costs and estimate the value of coverage PEPM (per employee per month) or PEPY.
Companies providing health insurance for their employees through a self-insured plan often subscribe to stop loss policies in order to protect themselves against catastrophic claims.
Provided that the PSL responds to the claims made on it, the unlimited liability thereby becomes to some extent limited.
Some are available as "mutuals" and, in the event that the market suffers large losses, may be unable to respond to any great extent.