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Definition

Definitions are a list of commonly used and rarely used but confusing workers’ compensation terms. These definitions include our former Terms of the Day from 2010 – 2012. All definitions were written by James J Moore – Founder.

Some of the terms may appear in other articles that are placed in other categories.   The definition articles now total 131.   One could have placed almost all the website’s terms into this category.

One can find any of the definitions by typing the term into the search box on any page of the website.  If you do not find the term using the search box, please let us know and we will add the definition and email you a copy of the article once we have added it to the website.

The basic worker’s comp terms that one needs to know as a foundation consists of four areas – claims, rating, agency, premium audit, and underwriting.

This blog focuses on claims, rating, and premium audits.  As we do not sell insurance, we do not focus on agency except in very general terms.

Understanding the basics of workers’ compensation will aid you in cost savings.  Premium reduction strategies are at the core of all the 1800+ articles that have been written since 2007.

If any one subject interests you, please feel free to contact our founder at [email protected] or by using the Contact Us form.

We are adding at least two articles per week to this website.   If you are reading an article, check for the links to other articles.  Many times, we will link to the definitions to better explain the subject matter in the article.

Aggregate Excess Insurance

Term Of The Day – Aggregate Excess Insurance This type of insurance is critical for Workers Comp self insureds. Even if a self insured has no

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Pure Captive

Term Of The Day – Pure Captive A pure captive is the most basic of all captive arrangements. In the case of a “pure” or “single

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What Is A Cell Captive?

Term Of The Day – Cell Captive A cell captive is either a rent-a-captive or a sponsored cell captive. The main goal is to lower risk

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Onshore Captive

Term Of The Day – Onshore Captive The onshore captive are a viable alternative to offshore captives such as Bermuda. The oldest and largest onshore

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Certificate of Compliance

Term Of The Day – Certificate of Compliance The certificate of compliance is important doc.A certificate which authorizes that a company is in compliance with

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Catastrophe Cover

Workers Comp Catastrophe Cover = Massive Losses Workers Comp catastrophe cover deals with massive losses.  Self Insured Employers may sometimes use a highly recommend risk

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Ambulatory Care

Term Of The Day – Ambulatory The definition of ambulatory care is any medical care delivered on an outpatient basis. Increasing numbers of medical conditions

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Operational Risk Management (ORM)

Term Of The Day – Operational Risk Management A continual cyclic process which includes risk assessment, risk decision making, and implementation of risk controls, which results

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Vis Major

Term Of The Day – Vis Major Vis Major means act of God or an unavoidable accident or calamity. Almost all insurance policies have a Vis

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Retention

Term Of The Day – Retention 1) Assumption of risk of loss by deductibles, noninsurance, or self-insurance. Retention can be unintentional when exposures are not

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BCAR

Term Of The Day – BCAR BCAR = Adjusted Surplus / Net Required Capital AM Best invented this term. It is a test of the

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Reinsurance Pool

Term Of The Day – Reinsurance Pool Pooling risks from across a certain population can minimize premium variances between groups and premium fluctuations per group.

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Records Retention

Term Of The Day – Records Retention The length of time that closed Workers Compensation claims file material should be retained by the insurance carrier,

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Earned Surplus

Term Of The Day – Earned Surplus Earned surplus for Workers Compensation insurance carriers, mutuals, captives, self-insureds, risk retention groups and captives, comes from the

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Acquisition Costs

Term Of The Day – Acquisition Costs Workers Comp policy acquisition costs (in most states) are broken down into four areas: Agent Commissions Premium tax

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Stop Loss Reinsurance

Term Of The Day – Stop Loss Reinsurance Protects a cedent against an aggregate amount of claims over a period, in excess of a specified

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Certified Risk Manager (CRM)

Certified Risk Manager Term Of The Day The CRM program is sponsored by the National Alliance for Insurance Education and research. From their website www.scic.com

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Disclaimer

Term Of The Day – Disclaimer A Disclaimer flags an incomplete audit.  An accountant or auditor’s statement which says the required audit was not complete.

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Payroll Limitation

Term Of The Day – Payroll Limitation For Workers Compensation, this limitation applies to executive officers and classifications with notes that indicate payroll limitation. The

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General Exclusions

Term Of The Day – General Exclusions General Exclusions cover unique exposures. In Workers Compensation, most employees are assigned one classification code. Certain operations present

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Certificate Holder

Certificate Holder-Workers Comp Term  The Certificate Holder is the entity that actually purchased the policy from the insurer. They are shown on the certificate of

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Deposit Premium

Term Of The Day – Deposit Premium The Deposit premium is unique from regular insurance premiums, because they are refundable should either the insured or

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What Are “A” Rates ?

Term Of the Day – “A” Rates When analyzing the premiums that very large deductible insureds pay their carriers, we often come across what is

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Standard Exceptions

Term Of The Day – Standard Exceptions The Standard Exceptions in a Workers Comp policy reduce premium payouts for the safer workers at a give

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Who Is An Additional Insured ?

Additional Insured-Workers Comp Term One of the most common additional insured is a subcontractor. The subcontractor may not have the proper insurance. The main contractor

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Qualitative Claim Auditing

Term Of The Day – Qualitative Claim Auditing Qualitative Claim Auditing refers to a review of claim files to explore the level of claims handling

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Seasonal Risk

Term Of The Day – Seasonal Risk A seasonal risk for Workers Compensation is when the workers are hired to work only certain times of

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Risk Avoidance

Risk Avoidance-Workers Comp Term In Workers Comp the term risk avoidance refers to one of the most obvious way to reduce risk to the economy

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Adjudication Is Day In Court

Adjudication – Workers Comp Determination The Workers Comp term Adjudication is the process in which a judge examines the evidence, arguments and legal argument brought

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Are Policy Provisions Important?

Policy Provisions – When Reality Hits The Policy Provisions trip up employers when filing claims.  Even adjusters sometime have trouble with the policy terms.  The

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What Is A Wrap Up Policy?

Term Of The Day – Wrap Up Policy Also known as a Contractor and/or Owner Controlled Insurance Policy, a Wrap Up Policy is a single policy

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