Loss Sensitive Insurance and Workers Comp State Laws Topics Updated in Construction Risk Management
This release of Construction Risk Management
contains an updated discussion of loss sensitive insurance
plans and an updated summary of state
workers compensation laws.
Loss sensitive insurance programs offer the opportunity to reduce insurance
costs below what the insured would pay under a guaranteed cost program. In
addition, loss sensitive plans provide cash flow benefits by charging a lower
premium up front and adjusting as losses become known. The trade-off is a
sacrifice of some stability because actual losses may be reflected in their
current year's operating results. Some of the more common loss sensitive
options are dividend plans, large deductible plans, and retrospective rating
plans. Loss Sensitive
Insurance outlines the advantages and disadvantage of this risk financing
option and provides insights into how to get buy-in from management, how to
assess the potential impact of an increased retention, how to measure if lower
premium trade-off is adequate, and how to mitigate the potential conflict of
interests loss sensitive programs create for insurers.
Workers compensation laws and benefits differ dramatically among states.
These differences in state laws and benefits can expose businesses to
liabilities far greater than expected, and properly insuring these risks may
require modifying the policy with one or more endorsements. Workers
Comp—State Laws provides insight into some of the key differences that
impact contractors, including types of allowable insurance, exempt employments,
whether subrogation waivers are allowed, treatment of occupational disease in
the law, and whether independent contractors and leased employees are
considered "employees" for workers compensation purposes, to name a
few.