The vast majority of businesses must have worker’s compensation insurance for their employees. However, the business does not have to have a specific policy. There are four reasons a company may decide to choose self-insured workers’ compensation.
Some companies want to manage risk using a proactive approach. These companies tend to want to control more aspects such as insurance claims. Self-insured workers’ compensation policies give that control to businesses rather than an insurance company.
The experts at Caitlin Morgan Insurance Services state that a company must meet the obligation of paying out workers’ compensation claims. Companies who have the financial resources and do not want the insurance carrier to keep what is not spent may benefit from a self-insured policy.
Some companies have good claims experience and do not need an insurance company to take on that task. Using this experience can save the business money on premiums.
Not all insurance companies manage claims the way a business would like. When this happens, a company may decide to change policies to better manage their own claims. A self-insured policy gives the business more involved in the overall process than it otherwise would have.
Self-insured workers’ compensation policies are not for all companies. There are many reasons to choose a more traditional plan. The business must evaluate both and decide for itself.