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

Workers Compensation Large Deductible Policies Worth It?


Workers Compensation Large Deductible Policies – Are They A Bargain?

Are Workers Compensation large deductible policies worth a look for cutting costs?   One great way to start is by going over the definition of these hybrid-types of policies.

picture of workers compensation large deductible policies old west
Public Use License – Paramount – Wikimedia

The idea to write this article was generated from quite a bit of buzz on whether high deductible health insurance policies are a great avenue for providing health insurance to one’s family or business.

Many states have their own sets of rules on large deductible policies.  The National Council o Compensation Insurance (NCCI) basically defines workers compensation large deductible policies as having a $100,000 or more deductible.

Many people in the insurance industry refer to a large deductible policy as any policy with a $250,000 or higher deductible.   I have not seen many policies below the $250,000 but they do exist.

To write this article, I will have to talk in overall generalities as there are so many different types of deductible policies, I could write a book on the different ways to underwrite these policies.

One misconception is that some companies seem to think they are self insured of sorts with a large deductible.

A few differences between self insurance and workers compensation large deductible policies are your company:

  • Has a Mod with large deductible policies, not so with self insurance (big surprise often)
  • Files are being handled by a carrier, not a Third Party Administrator, you are still being insured
  • Still pays a premium or file adjustment fee per $100 of coverage –many versions of this
  • Can still “bust your deductible” without realizing it – the nasty aggregate deductible

An aggregate deductible is defined as the total claims volume deductible not per claim.   A company may never reach the $250,000 deductible limit. However a rash of medium-sized claims will go over the aggregate deductible.

I have seen many large deductible programs survive for many years.  The employers that seem to have troubling policy years are the ones that do not budget in enough for Risk Management and Safety.

I will not cover how the large deductible policies are charged  and billed premiums due to numerous versions.

The bottom line – bargains do exist.  Make sure you have the right advice before pursuing workers compensation large deductible policies.


©J&L Risk Management Inc Copyright Notice



Large Deductible Mods Do Exist

Large Deductible Mods Large Deductible Mods do exist even if you have been told otherwise.  Your company may have been informed that once you have

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.