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As a business leader, you have the power to make many choices based on what you think is best for your business. When it comes to your business insurance, you probably want to be able to do the same.
So if you’ve been told you’re being put into a pool that will randomly assign a workers’ comp carrier to you, you might be concerned. We get it. But fortunately, just because you are in the pool now doesn’t necessarily mean you will be treading in the deep end forever.
At Berry Insurance, we’ve seen a number of our clients work their way out of the workers’ comp pool, so we are familiar with the strategies you can potentially use to get out yourself!
In this article, we’ll go over what the MA workers’ compensation assigned risk pool is, why you might be in it, and how you can get out of it.
Table of contents:
Why am I in the workers’ comp assigned risk pool?
When insurance carriers do not want to write a workers’ comp policy (for reasons we will list below) that business is placed into the workers’ comp pool to be assigned to an insurance carrier. That way all of these less desirable businesses will be evenly distributed among workers’ compensation carriers.
Reasons you may be in the workers’ comp pool include:
- Having a poor claims history
- Being an inexperienced entity (with no insurance history)
- Working in a high-hazard industry
Insurance carriers consider businesses with these characteristics more likely to have a claim, so they may not want to provide a workers’ comp policy. However, because workers’ comp insurance is required in MA, the pool is designed to designate a carrier for you.
What’s wrong with being in the workers’ comp pool?
If you’re in the pool, there are no extra charges or fees - the only issue is you don’t get to choose your insurance company and you often don’t have flexibility in terms of payments. A standard insurance company may give you 10 pay installment, but with the pool you may either owe it all in full, or 50% then 50%.
If that is an issue for you, you may be itching to get out of the workers’ comp pool. So in the section below, we’ll explain how to get out of the pool if you are in it for any of the reasons we mentioned above.
How to get out of the workers’ comp pool:
Improve claims experience:
If you are in the workers’ comp pool for having a poor claims history, the only way to get out is to improve your claims history. And the easiest way to reduce claims is through a thorough safety plan. This should include risk identification and management and ongoing safety training with all employees. You could even consider establishing a safety committee or using a safety or incident management software.
Even if you do make the efforts above, you can’t prevent all injuries, so it is also important that you know how to properly manage injuries when they do happen.
This is because in addition to claim frequency, claim length can also increase your workers’ compensation cost. Insurance companies want as few open claims as possible, so lengthy claims will negatively impact your workers’ comp cost.
That’s why you should have a plan in place to help return injured employees to work as soon as possible. This could include a light duty policy, which will allow employees to return to work without having to do any duties that will aggravate their injury.
If you work with Berry Insurance, we can provide sample safety plans, return to work plans, and other safety tools to help employers manage claims before they ever become a problem.
To learn more, read this article: How to Reduce Workers’ Comp Costs by Managing Employee Injuries.
Wait it out:
If you are in the workers’ compensation pool because your business is young, your only option is unfortunately to wait it out.
If you don’t experience any claims and aren’t considered a high risk industry, you should be able to get out of the workers’ comp pool in a few years.
Work with an agent who can help you with claims or to find a new carrier:
If your business is in a high-hazard industry, you may just be out of luck. Carriers may not be willing to write a policy because of your risk.
However, every carrier is different. Just because one carrier won’t write your policy, doesn’t mean everyone won’t. And just because one carrier doesn’t write your business one year, doesn’t mean they won’t the next year. Carriers change their underwriting guidelines so frequently that the same rules may not apply year to year.
So you may be able to do some research to see if there is a carrier that will take you on. Even better, you could work with an independent agent who can shop your insurance among several carriers to find one who may be willing to write for you.
Find the right resources to manage your workers’ comp policy
Being in the workers’ comp pool can be frustrating. But in many cases, there is light at the end of the tunnel. And there are often things you can do to help improve your workers’ comp situation.
As we mentioned, an independent insurance agent can help you find the right workers’ comp carrier for you. But they can also do several other things to help you manage your workers’ comp policy, many of which will save you money and time.
To learn more, read this article: 7 Things your Workers’ Compensation Insurance Agent Should be Doing for You.
