Workers Comp Audit Stress Reducer
Use It For Your Next Premium Audit

Fronting Agreement Can Be Used For Captives and Non-Captives


Fronting Agreement Popular With Captives

A fronting Agreement covers two types of “foreign” companies and insurers. In general terms, and usually for Workers Comp purposes, one insurer produces a policy for a third party, but all of the losses are the responsibility of a second insurer. This is, of course, a fee based arrangement.

Picture Of Hand Draw Fronting Agreement Shake Hand

This agreement provides a solution when a employer’s provider is not “admitted” to do business in a certain state, but the employer needs coverage there. The employer’s insurer enters into a Fronting Agreement with an “admitted” insurer to write the policy, again for a fee. If there are any claims against the policy, the employers original insurer bears all liability.

Most states have very specific rules on these financial arrangements.

Captive insurers often use these Fronting Agreements when they are not “admitted” in all states. Self-insureds often use Fronting Agreements to satisfy financial or statutory requirements.

As we all know, the business of Workers’ Compensation is complex at best. Fronting policies are, to say the least, complicated and should be examined thoroughly. Even though they can take on any number of forms, the one common denominator is that the claims are still paid by the insured.

©J&L Risk Management Inc Copyright Notice

James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


Get the latest workers' comp news FREE!

This field is for validation purposes and should be left unchanged.