What is An Assigned Risk Plan?

An assigned risk plan or pool is a means of providing insurance for businesses that may not be able to get workers’ comp insurance in the private market. Individuals states established assigned risk plans to make sure employers can obtain workers’ compensation insurance even if standard insurance providers did not want to offer coverage. Common factors for businesses that require usage of the assigned risk plan are:

  • High-risk businesses such as steel operations or roofing
  • Businesses with a history of many claims
  • Businesses in new industries without a previous industry claims history

Typically, the employer or the agent applies to the plan. The application is then assigned to an insurance company that the state has designated to write the policy. Premiums in assigned risk pools often carry a surcharge over the regular premium rate.

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