What is the Workers Compensation Assigned Risk Pool and How Do I Get Out Of It?

In the state of New Jersey, there are 2 main types of workers compensation insurance policies. They are the standard market and the assigned risk (often referred to as the residual market). Standard market workers compensation insurance policies are backed by one standard market insurance company of the employers choosing where as the assigned risk pool is assigned to an employer through a particular insurance company determined by the state.

Often it is the case that companies which have assigned risk workers compensation policies think they are stuck in the pool due to losses and they are unable to remove themselves from the pool but this doesn't always have to be the case. It is more of a matter of painting a picture and improving processes.

One challenge when a company is placed into an assigned risk policy is that there is a surcharge or penalty (usually between 20 and 40%) which has to be paid in addition to the standard premium. Another challenge with assigned risk policies is getting service when a claim occurs is often difficult due to it being a state run program.

The good news is that in many cases, employers (in most classes of business) can be removed from the assigned risk pool without having to wait until the policy expiration date. You need to have a broker who has strong relationships with carriers and understands the inner workings of workers compensation insurance as it can be very complex.

Reach out to our team when you would like to review your company's coverage or when you have somebody in your network complaining about their workers compensation.

Thank you.

SE