Assigned Risk Workers Compensation Insurance

An assigned risk policy is one kind of policy some insurance companies may sell to certain businesses seeking to purchase workers compensation insurance. Assigned risk policies exist because state governments mandate that almost all businesses have a workers compensation insurance policy to cover the expenses incurred by any of their employees who become ill or injured on the job. Just as with other kinds of insurance, assigned risk policies are for businesses whose level of risk for filing a claim is so high that the insurance companies view their policy as a liability rather than an asset. Because of this, assigned risk policies are usually much more costly than other workers compensation insurance policies. Depending on where you live, if your business has a high risk of employee injury or illness, an assigned risk policy may be your only option. Sometimes these policies are only available through the state government, but in other cases they are available for purchase through the private sector.

It is in your best interest as a business owner to avoid an assigned risk workers compensation insurance policy if you can. Some private insurance companies sell assigned risk policies to businesses without making it clear to the business that it has been grouped into this category. Be sure to discuss with your insurance agent whether or not you are in an assigned risk plan. If the only workers compensation insurance policies you find available for your business are assigned risk plans, look into ways of reducing your level of risk in order to purchase a less-costly workers compensation insurance policy.

Sometimes you can reduce the cost of workers compensation insurance and avoid an assigned risk policy just by increasing safety around the workplace. Educate your employees about proper safety procedures and document your efforts for your insurance provider. Also research workers compensation insurance claims filed by other businesses in your industry. If you see any trends in your research, use these to determine what measures you can take to prevent workplace injuries in your business before they happen. Your business will be less likely to be placed in an assigned risk plan if you have a good safety record, even if your business is in an inherently risky industry. Discuss with your insurance agent what factors could place you in an assigned risk policy and how to avoid them.

 

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