What is excess workers’ compensation insurance?

When your business chooses to self-insure, you agree to cover employee injury claims directly, up to a certain retention level (similar to a deductible). Excess coverage activates once claims go beyond that level.

There are two common types of excess workers’ compensation coverage:

Specific excess insurance helps protect your business against unusually large individual claims. For example, if one workplace injury results in exceptionally high medical costs, specific excess coverage takes over once you exceed your set threshold.

Aggregate excess insurance can help protect against the combined costs of multiple claims within a policy year. If the total claim amount for the year exceeds your retention, aggregate excess kicks in.

Adding excess coverage to your self-insured workers’ compensation program offers several advantages:

• Financial protection from catastrophic claims that could otherwise put your business at risk.

• Stronger long-term cost management, since you can self-insure day-to-day claims while safeguarding against worst-case scenarios.

• Risk management support, as carriers like Sentry often provide safety services, claims expertise, and loss-prevention resources alongside coverage.

• Regulatory compliance, since some states require excess coverage as a condition of self-insurance approval.

Excess coverage is most common among large businesses that self-insure their workers’ compensation programs. These employers typically have:

• The financial resources to cover routine claims directly

• A tolerance for some risk exposure

• A desire to control costs and claims management internally

Not every business is eligible for self-insurance, and not every state permits it. For smaller companies, traditional workers’ compensation coverage or guaranteed cost plans may be more practical.

At the end of the day, the right choice depends on your company’s size, financial stability, and appetite for risk.

At Sentry, we’ll work closely with you to provide workers’ compensation coverage tailored to your needs. We also bring in-house claims expertise, risk management support, and the financial strength you need in a long-term insurance partner.