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Assigned Risk Plan (The Pool)

A Workers Compensation Term Defined, Described, Explained

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Assigned Risk Plan (The Pool)...

Sometimes called the Pool. The Assigned Risk Plan was established by individual states to make sure employers can obtain workers compensation insurance even if standard market insurance companies are not willing to provide coverage for their business. Assigned Risk Plan rates are generally higher than those for the same classification codes in the standard market. Assigned Risk Plans are generally the market of last resort for many states.

For those who end up in an Assigned Risk Plan, anticipate a rude awakening! This is not the place you want to be! It's the market of last resort. You'll find work comp rates in the pool are higher. Not only are the rates higher but another significant factor that could be applied and could make a big increase in the premium paid is the application of the ARAP factor.

You'll find that somewhere around 10% of all insured employers found within NCCI governed states are swimming in the pool! A significant number of insureds.

Here are some common factors and type of employers who may find themselves in an Assigned Risk Plan:
  • Those employers whose operations fall within a high-risk industry such as high steel operations or roofing;
  • Employers whose loss records are no longer acceptable to insurers who operate in the standard market place;
  • Many employers new in business are not considered acceptable in the standard market and are thus forced to secure workers comp coverage through the Assigned Risk Plan;


Since workers compensation coverage is required by state law within most states you'll find that Assigned Risk Plans (Pools) were needed in order to meet the needs for those employers who could not secure workers comp coverage through the standard market. Another point of consideration is that these markets of last resort can vary a great deal from one state to another. Some states administer their own programs while NCCI, the National Council on Compensation Insurance administers others.

So as a parting thought, remember, the workers compensation pool is not a place you want to be!




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