What Are The Risks vs. Rewards Of Joining A Self-Insurance Group?
Self-insurance groups offer many advantages over insurance company plans. When evaluating participation in a self-insurance group one must weigh the numerous rewards against the following risks: Joint and Several Liability: In a majority of cases, members of the group are both jointly and severally liable for workers’ compensation and employers’ liability losses incurred by the membership while they are members of the group. The subsequent bankruptcy or termination of a member does not release the remaining group members for this liability. Multi-State Operations: Self-insurance groups are regulated by the state and may only cover exposures within that state. As a result, an employer with operations in more than one state must find an insurer, another self-insurance group, or alternate means to cover any out-of-state portions of the workers’ compensation exposure. Administrative Functions and Additional Costs: Many of the services usually provided by an insurer (i.e. claims administrat
