Self-insured plans

FAQs

• What is the difference between a self-insured workers’ compensation plan and a large deductible plan?

  While these plan structures are similar, in that the insured business takes on most, if not all, financial responsibility of a loss, the fundamental difference is this: With a large deductible plan, you are still technically insured but you reimburse the insurance company for losses within your deductible. Since you’re insured, the insurance company is ultimately responsible for the loss costs. With self-insured workers’ compensation, the employer, not the carrier or claim administrator, is ultimately responsible for the loss costs. You can discuss the finer point with our knowledgeable people and determine which, if either, of these plans makes sense for you.

• What types of businesses most often choose self-insured workers’ compensation?

  Self-insurance plans tend to work best for large employers with the financial resources—and stability—to handle the unpredictability of workers’ compensation claims. There are, however, many smaller businesses who choose to self-insure. Ultimately, it comes down to your business’s financial situation and tolerance for risk. Also, keep in mind that not all states permit businesses to self-insure.

• If my business chooses to self-insure, how can we financially protect ourselves against unexpected or catastrophic claims?

  Most businesses that choose to self-insure will also purchase excess insurance, allowing them to safeguard against unexpectedly large losses. At Sentry, we offer excess coverage for self-insured businesses, acting as the third party administrator (TPA). In these cases, we maintain control of handling claims—which, considering our knowledgeable claims team, is an excellent value for the business.