workers compensation programs

Types of Workers’ Compensation Programs

Whether you’re an entrepreneur just starting out or a long-established company with offices across the nation, you have several options for workers compensation programs. One of them is a guaranteed cost plan, which offers fixed-rate premiums for the employer despite a company’s actual loss experience. Here are a few more to consider.

Self-Insured

A business pays any workers’ comp claims out of its own pocket. Since the employer is taking on the financial risk itself, it doesn’t need to pay fixed premiums to an insurance company or state-funded workers’ comp program.

Captive Insurance

A company can set up its own insurance company, which is wholly owned by and works only for the parent company. The parent specifies the risks to underwrite, then the captive evaluates risks, writes the policies and sets the premium rates. It also collects premiums and invests the money, as other insurers do, to cover any future claims payouts.

Large Deductible Plan

This is meant for large organizations with multi-state offices. Deductibles are usually between $100,000 and $1 million for each case. As with a typical policy, companies reimburse their insurance provider for payments to a workers’ comp program. The organization also provides a security for the deductible.

These workers compensation programs offer different benefits to each client type. Discuss the pros and cons with your financial advisor and insurance provider to find the right fit for you.

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