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Workers Compensation Shop.com » Workers Comp information » State Fund Insurance

State Insurance Funds

State Fund insurance programs guarantee that all employers can purchase workers compensation coverage.

We Help Employers Buy State Fund Insurance Coverage.  Call 888.611.7467 Today.

State Compensation Insurance Fund

Most states require employers to obtain workers compensation insurance coverage in order to provides their employees with medical benefits and compensation for lost wages due to injury or illness, occupation disease, or death arising while on the job.  Generally, workers comp insurance coverage can be purchased from a voluntary market insurance carrier.

In some instances employers are unable to find a voluntary market carrier willing to quote comp coverage.  Some common reasons for this are 1. poor loss experience related to either the frequency of claims or the amount paid for claims versus the premium paid (also know as a high Experience Modifier), 2. the dangerous nature of the risk or job classification codes, 3. prior bankruptcies or poor financial status of the employer, and 4. prior cancellations due to nonpayment of workers compensation premium. 

Workers Compensation Insurance is Mandatory

Since work comp is mandatory across the United States, every state makes work comp insurance available to every employers required to purchase coverage in the state.  These programs are referred to as the Residual Market.  They are more commonly known as State Funds, Assigned Risk Plans, or a Pool Policies. There are several ways in which a particular state may set up one of these residual markets. Some states establish their own State Fund to write coverage.  Other states even create competitive state fund which write both pool policies and voluntary market policies.  States such as Florida, establish a joint underwriting association (JUA) to provide coverage.  However, most NCCI states establish Workers' Compensation Insurance Plans (WCIP, or Assigned Risk Plans, which are administered by NCCI- National Council on Compensation Insurance, Inc.

Each WCIP State Fund is the mechanism through which eligible employers who are unable to find workers compensation coverage in the voluntary market must use to purchase workers' compensation insurance.  Some states require proof of declination from one or more carrier in order to access the State Pool.

Insurance coverage through the State Fund often costs 15% - 40% more than it would through a standard voluntary market. Therefore, these comp programs should always be the last resort. Even when a state fund rates seem reasonable, they are often more difficult to deal with and unable to provide multi-state comp coverage if needed.

At Workers Compensation Shop.com, we work with State Funds and Residual Markets in most states; however, our goal is always to help relocate our insured's' out of these markets each year as the policies renew.  Our Specialists help employers understand exactly what it takes to lower their work comp rates and find voluntary coverage.

Avoiding State Insurance Fund Coverage

If you are with a State Fund or have a pool policy in your state your goal should be to find cheaper coverage. Sometimes its simply a matter of shopping your policy with a large national agency that specializes in work comp, like Workers Compensation Shop.com.  Often it comes down to controlling your work comp losses and claims over a period of time.  We have carries and Safety Programs designed to help with these issues.

Employers should endeavor to prevent injuries from occurring with training and safety initiatives.  When injuries do occur, employers need to have a quick, caring, and responsive claims management system in place to help employees recover and return to work as quickly as possible. Employers should also communicate with employees frequently throughout the recovery process and provide a Return to Work Program when possible.

The Following State Fund Pools Are Managed by State Bureaus or Organizations and not by NCCI

• Indiana Assigned Risk Reinsurance Pool.

• Massachusetts Workers Compensation Assigned Risk Pool.

• Michigan Workers Compensation Placement Facility.

• Mississippi Workers Compensation Assigned Risk Pool.

• Wisconsin Rating Bureau.

Employers are Typically Eligible for a State Fund Program Under the Following Conditions

• Received the required number of voluntary insurer declinations.

• No outstanding offers of voluntary coverage.

• No outstanding insurance premium obligations, non-compliance issues with audits or reasonable safety recommendations .

• Not made material misrepresentations when applying for coverage.

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