5 Pitfalls of the Workers' Compensation Assigned Risk Pool

A commercial business account is considered too hard-to-place with a standard Workers’ Compensation carrier, due to high risk factors that could include new operations, poor losses, or tough exposures, which all result in high experience mods.  These types of accounts may be delegated to the Workers’ Compensation assigned risk pool, also known as the state fund or pool.

In what is often referred to as the “market of last resort,” the assigned risk pool is a safety net established by insurance regulators in each state, that requires insurance carriers to pool together to support employers with Workers’ Compensation coverage for difficult risks.  In the majority of cases, premiums are considerably higher within the pool, as insurance companies take higher risks insuring these policies.  As an agent, marketing these risks can be difficult and time-consuming with very few options, if any.  Most options are not ideal or extremely limited. 

Before surrendering your client to the assigned risk pool, let us explain the top five pitfalls of doing so and how All Risks, Ltd. can relieve you from the trouble.

Pitfall #1
Multiple policies to manage when your client expands to additional states.
Reaching out to the existing carrier to add the additional exposures if a business owner expands to new states is not an option if the insured is in the assigned risk pool.  Instead, you will have to apply to each state’s assigned risk pool for a separate policy on behalf of your client, for each individual state the business is expanding into.  Working with All Risks on a tough account with multi-state exposures allows for a single policy with one of our A.M. Best "A-" or better rated WC carriers.

Pitfall #2
Payment plans are not as generous or flexible.
Most assigned risk pools do not offer payment plan options and insureds are often required to pay their premiums in full in advance.  All Risks’ Workers’ Compensation carriers offer a variety of payment plans, including monthly installment billing, payroll reporting via payroll companies and monthly self-reporting options.  In addition, flexible payment plans often eliminate annual audit surprises, since payroll is reported monthly.

Pitfall #3
Loss control programs are less comprehensive.

Loss control programs within the assigned risk pool are not as expansive as the carriers in which All Risks supports.  Our carriers hire loss control professionals who diligently work with your clients to reduce their exposures by providing the right amount of service to those that need it most.

Pitfall #4
Lack of quality claim support.

Claims adjusting is the most critical part of meeting the contractual obligations a carrier has with an insured once a claim occurs.  All Risks and its carrier trading partners recognize the benefits of having experienced claims adjusters committed to your clients' business.  Their primary goal is to be an effective member of your clients' risk management team.  Our carriers’ claims adjusters support your clients with a high level of quality and accuracy.

Pitfall #5
Expect to receive lower commissions.

Commissions with All Risks’ carriers are consistently higher than the assigned risk pool.  In addition to this, depending on the size of the account, you may have access to our carriers’ additional benefits, which could include dedicated client service coordination with a single point of contact for all questions and inquiries, individually assigned indemnity claims professionals, an executive summary report prior to renewal, access to online claim notes, loss runs, billing information, online bill pay and more!

Reach out to us today to learn more about why working with All Risks is far superior to simply placing an account in the assigned risk pool.  You’ll gain exclusive access to many A.M. Best "A-" or better rated carriers, securing the best terms and coverage for your clients when you work with All Risks’ Workers’ Compensation team!

Connect with our Workers' Comp team today!

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Legal Disclaimer: Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.