Businesses in high-risk industries like transportation and manufacturing often struggle to find the Workers’ Compensation they need to protect themselves and their employees. As a result, many businesses consider coverage alternatives, like assigned risk. But is assigned risk the best fit for a high-risk business?
What is Assigned Risk?
Assigned risk is a method of providing Workers’ Compensation coverage for those who struggle to find coverage in a traditional market. Through assigned risk, insurance companies are required to provide coverage. In many cases, insurance companies will pool together to collectively accept the assigned risk and provide coverage. Assigned risks plans are typically administered by the National Council on Compensation Insurance (NCCI), a state insurance fund, or a state rating agency.
The Downsides of Assigned Risk
The main benefit of assigned risk is that it offers a way for high-risk businesses to find Workers’ Compensation coverage. However, assigned risk has many downsides.
One of the biggest downsides is assigned risk is cost. Workers’ Compensation policies purchased through assigned risk plans are typically more expensive. Additionally, business with an experience modifier of 1.0 and higher might be subjected to further surcharges.
Assigned risk also typically provides more restricted coverage, despite having a higher cost than traditional insurance plans.
Similarly, assigned risks policies are entirely issued and managed by the plan administration or servicing carrier. This means that businesses can’t choose their insurer, which may lead to them missing out on the best insurance options for their high-risk needs.
Finding New Alternatives
For high-risk businesses, assigned risk is not the only option for finding coverage! At PEO Insurance Brokers Network, we help agents find the strongest homes for all clients, including those in high-risk industries. We provide Workers’ Compensation coverage to businesses in need, no matter the risk, and help agents find the best PEO coverage and savings for their insured.
To learn how we can help you find coverage for your high-risk clients, email quotes@peobrokersnetwork.com to receive a quote.
