Plan Comparison

Workers' Compensation Plan Comparison And Analysis Recap

Guaranteed Cost

Premium Size: All accounts under $100,000


  • Fixed cost
  • No premium impact in current year
  • All inclusive
  • No Risk Involved


  • Higher policy year costs
  • No savings on good years
  • Subject to market whims

Retrospective Rated

Premium Size: Minimum $100,000


  • Simplest way to share in risk
  • Ability to pay less
  • Expenses stay with the carrier
  • Collateral usually not required
  • Disadvantages

    • Cost can increase
    • Recalculations may negate returns
    • Multi-year process

    Deductible Plans


    • Reduced up front costs
    • Greater potential for savings
    • Greater cash flow
    • More control over claims and Loss Control


    • Increased risk of higher costs
    • Collateralization required
    • Long term process
    • Large premium and assets req.

    Captive Programs

    Premium Size: $250,000 plus


    • Stability of coverage and pricing
    • More control over claims and service
    • Return of unused loss fund and invest. income
    • Lower fixed costs
    • Can participate at lower premium levels
    • Multi-state capability is easier


    • Possible significant penalties
    • Long-term capital investment
    • Pyramiding of letters of credit
    • Responsibility for other's losses

    Self Insurance

    Premium Size $1,000,000


    • Lowest fixed costs
    • Maximum use of cash
    • Maximum control over claims
    • Experience tends to improve


    • Government regulations, controls and monitoring
    • Highest degree of risk
    • Requires substantial commitment in resources and manpower
    • Difficult in multi-state situations
    • Ties up credit and capital to the greatest extent