Workers Comp Assigned Risk Pool For Safe Companies?
This workers comp Assigned Risk Pool question is usually from an employer that is totally exasperated at the work comp system. How does such a safe company end up in the workers comp assigned risk pool?
The Assigned Risk Pool is unfortunately not for unsafe companies that have a high E-Mod or X-Mod. In an associated coverage, tow truck drivers cannot obtain liability insurance as carriers have pulled out of this market. The same situation occurs in the work comp markets.
Your company may be a safe company is what is considered by insurance carriers as a very unsafe type of employer. One has to remember that a Modification Factor (EMod XMod) is how your company compares to similar companies. In a very unsafe industry, you could even have experienced a few accidents and have a lower Mod.
Why? Because your E-Mod is a comparative figure. It is not a standalone measurement whatsoever.
For instance, having two accidents in an administrative assistant based company is going to increase the E-Mod very heavily compared to the same two accidents in a construction company.
Trucking transportation and temporary agencies are two type of companies which have recently had no or very few carriers willing to write coverage. Staffing agencies (temp to perm) companies have experienced this conundrum in certain states or regions.
A company has to be very careful when venturing into alternative coverages. You may not have the coverage that your state requires to stay in business. Many states such as West Virginia have been very aggressive with uncovered employers.
One very unfortunate development with being in the workers comp assigned risk pool is the sharp increase in premiums.
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2 Responses
Good explanation.
Richard, Thanks for the compliment. The market Mod, so to speak, is one of the top two or three most frustrating subjects of emails and phone calls that I receive from employers.