Why Might a Private Insurance Company Not Want to Write my Workers Compensation Policy?
Although you must have workers’ compensation coverage, private insurance companies are under no obligation to sell it to you. They each have their own underwriting guidelines and regularly reject business. Rejection usually occurs for one of three reasons: • High risk – Some industries, such as construction, roofing and window washing, are considered high hazard. The higher the hazard, the greater the potential for costly claims. • High claims history – Companies that have a history of high workers’ compensation claims activity will find it difficult to find insurance from private companies. Insurers maintain that this level of claims indicates a lack of attention to safety. • Small size – Start-ups and many small businesses find themselves being rejected because they are either too new or too small. Insurers maintain that these companies are difficult to insure and they can’t make a profit from small policies.
Although you must have workers compensation coverage, private insurance companies are under no obligation to sell it to you. They each have their own underwriting guidelines and regularly reject business. Rejection usually occurs for one of three reasons: • High risk – Some industries, such as construction, roofing and window washing, are considered high hazard. The higher the hazard, the greater the potential for costly claims. • High claims history – Companies that have a history of high workers compensation claims activity will find it difficult to find insurance from private companies. Insurers maintain that this level of claims indicates a lack of attention to safety. • Small size – Start-ups and many small businesses find themselves being rejected because they are either too new or too small. Insurers maintain that these companies are difficult to insure and they can’t make a profit from small policies.
