Deductible Workers' Compensation Plans
Navigating the Complexities of Deductible Plans
Selecting the right deductible plan is a critical decision that hinges on your business’s risk tolerance, financial strength, and claims management strategy. Deductible plans offer varying levels of risk retention and potential cost savings, but also present complexities like the management of claims. Deciding whether to use a Third-Party Administrator (TPA) or a carrier-mandated “bundled” approach can significantly affect your overall costs.
Knowing the intricacies of each deductible plan option is vital to optimizing your workers’ compensation strategy.
Types of Deductible Workers' Compensation Plans
Small Deductible Plans
Lower deductible amounts, typically $5,000 to $100,000 per claim.
- Easier to budget
- Less financial risk per claim for the employer
- Premium savings might be limited compared to higher deductible plans
- Evaluating whether to use a bundled or unbundled claims management approach is crucial, as it can impact claim management costs
Large Deductible / SIR Plans
Higher deductibles, often starting at $100,000 per claim.
- Greater control over claims management
- Potential for substantial premium savings
- Higher financial risk per claim
- Requires strong cash flow, claims management expertise, and a collateral (LOC) to fund expected losses
Aggregate Deductible Plans
Combines a per-claim deductible with an aggregate limit, capping the total deductible amount paid over a policy period.
- Predictable maximum financial exposure
- Balanced risk and savings
- Complex to manage
- Requires careful monitoring of claim trends and a collateral (LOC) to fund expected losses
Find Your Ideal Workers' Comp Plan Now!
Is your current plan the best fit for your business? Answer a few quick questions to get a tailored plan recommendation with our free Workers’ Comp Plan Adviser tool.
Tailored Solutions to Enhance Your Deductible Plan
Liberty offers a comprehensive suite of products to enhance your deductible plan and reduce costs, improve outcomes, and ensure your plan is fully optimized for your business’s needs.
Proactive claims management
Data analytics
Risk control services
With over 150 years of collective experience, Liberty’s National Workers’ Compensation Practice delivers personalized support and strategic guidance. We leverage cutting-edge analytics to help you uncover hidden costs and ensure you’re in the optimal plan for your business.
Request More Information
About Workers' Compensation
Unsure if your current deductible plan is the best fit? Schedule a consultation with our experts to review and tailor a plan that maximizes your savings.