Advisory Organization The new designation, recently coined by the National Association of Insurance Commissioners for an entity known as a rating bureau (such as the National Council on Compensation Insurance). This new term is meant to reflect more accurately the role of NCCI and other such organizations (like Insurance Services Office) that compile rating data and file policy forms for use by member insurance companies.
Agent, insurance An insurance producer who represents the insurer, as either an employee or an independent contractor, in negotiating, servicing, or effecting insurance policies.
Agent of record letter A document by which a company authorizes a designated agent to handle specified insurance business on behalf of that company.
ALE See allocated loss expenses.
Allocated loss adjustment expenses Loss adjustment and handling costs that can be allocated to a specific claim.
Allocated loss expenses (ALE) Insurance company costs for adjusting and settling claim that can be identified with a specific claim. The ALE are often then included in the claims costs used to adjust premium in some loss-sensitive premium adjustment types of workers’ compensation policies, such as sliding-scale dividend plans or some retrospective rating plans or retention plans.
Alternative employer A company that provides workers for a third party and maintains an employer relationship with them, such as a temporary employment agency, a professional employer organization (PEO), or an employee-leasing company.
Alternative employer endorsement A written amendment to an insurance policy that extends coverage for people who work for a company while employed by another, such as workers from a temporary agency or an employee-leasing company.
Anniversary rating date (ARD) The month and day when manual rules and rates and the experience rating modification factor apply to a workers’ compensation policy. This is usually the date on which the policy becomes effective and each anniversary of that date.
Anniversary rating date endorsement A written amendment to an insurance policy that advises the insured company that the premium, rates, and experience rating modification factor may change on the anniversary rating date.
ARAP In all states but Massachusetts, assigned risk adjustment program – an additional debit charge placed on assigned risk policies (in National Council on Compensation Insurance jurisdictions) with experience modification factors higher than 1.00. In Massachusetts, all risk adjustment program, a surcharge to adjust for reported losses greater than expected under the experience rating pan, in addition to the experience modification factor, a surcharge for which every employer, whether in the assigned risk pool or the voluntary market, is eligible.
Assigned risk adjustment program (ARAP) An additional debit charge placed on assigned risk policies (in National Council on Compensation Insurance jurisdictions) with experience modification factors higher than 1.00.
Assigned risk plan A mechanism established by individual states to make sure that employers can obtain workers’ compensation insurance even if insurance companies are not willing to write such insurance on a voluntary basis. Assigned risk plans in many states carry higher rates than the voluntary market. Also known as an assigned risk pool, the involuntary market, or the residual market.
At-will employment Employment that is presumed to be voluntary and indefinite for both the employee and the employer: the employee may quit the job at any time, for any or no reason, and the employer may discharge the employee at any time, for any or no reasons, even unfair reasons, with certain exceptions.
Audit A review of the financial records of an insured company conducted by the insurer, for the purpose of adjusting the premium paid. An audit is usually performed annually, after the policy period ends and when the items to be audited are assumed to be final. If it is determined that the premium was too low, the insurer will assess an additional premium. If it is determined that the premium was too high, the insurer will issue a return on the premium.
Audited premium The final premium for the policy term, produced by auditing actual payroll exposures.
Audit work papers Workheet prepared by the premium auditor, can be either hand-written or computerized, showing how the auditor arrived at the payroll numbers that are used to determine the audited premium.
Average Weekly Wage A calculation that reflects the average rate of remuneration of employees, used as a basis for determining benefits in workers compensation insurance.
Basic charge A factor used in calculating the premium for a retrospective rating plan, a percentage of the standard premium.
Basic Manual The Scopes® of Basic Manual Classifications, produced by the National Council on Compensation Insurance, a guide that details which kinds of workplace exposures belong in particular workers’ compensation classification codes. Also known as the Scopes® Manual.
Broker, insurance An insurance producer who works solely as the representative of the policyholder, to seek out insurance coverage, and is not contracted as an agent of any insurance company.
Broker of record letter A document by which a company authorizes a designated broker to handle specified insurance business on behalf of that company.
Captive See captive insurer.
Captive agent An insurance producer who represents only one insurance company and cannot by agreement submit any business to any other company unless the company that he or she represents has rejected it. A captive agent is not employed by the company, but usually receives financial assistance for office expenses and some employee benefits.
Captive insurer An insurance company organized and owned by a business entity for the purpose of providing the entity with insurance at lower rates. It is usually not authorized by the state’s insurance department to do business in that state but it has the right to reinsure with an insurer that is so authorized, under special circumstances.
Certificate of insurance (COI) Written evidence of an insurance policy, indicating both the types of coverage and the amounts. It provides legal assurance that a company is providing workers’ compensation insurance for certain workers. If a company uses contract or leased workers and it does not have a copy of a certificate of insurance, it may be charged for covering those workers if audited.
Certified Insurance Counselor (CIC) Designation granted by the National Alliance for Insurance Education and Research. To attain this designation, a person must take five CIC courses and pass the examinations.
Chartered Property Casualty Underwriter (CPCU) Designation granted by the Insurance Institute of America. To attain this designation, a person must pass a series of ten examinations administered nationally, meet certain minimum requirements for experience in the insurance industry, and adhere to a code of ethics.
CIC See Certified Insurance Counselor.
Classification code An identification of activities that is used to place an insured organization into underwriting and rating groups as a basis for computing premiums. Also known as class code.
Classification, governing See governing classification.
Consolidated insurance program (CIP) Insurance for a large construction project that the owner or general contractor arranges to combine the interests of the owner, the general contractor, subcontractors, architects, engineers, surveyors, and any other involved in the project and cover them under one policy with a single insurer. A CIP always includes workers’ compensation and usually also general liability, umbrella liability, and builders’ risk insurance. Also known as owner-controlled insurance program (OCIP) and wrap-up insurance program (wrap-up).
Contingent commission An incentive paid by an insurance company, in addition to the regular or ordinary commissions received for selling policies. Contingent commissions may be based on a certain volume of business, an increase in business, the profitability of the policies, or any combination.
Contractors’ premium adjustment credits Credits available for a qualifying workers’ compensation insurance policy that contains one or more contracting classifications and has a specified minimum of its exposure or premium in the contracting classifications.
Converted losses A loss factor used in retrospective rating plans calculated by multiplying losses by a loss conversion factor.
CPCU See Chartered Property Casualty Underwriter.
Credit modifier An experience modification factor adjusted downward to reflect a history of reported past losses lower than average.
D-ratio See discount ratio.
Debit modifier An experience modification factor adjusted upward to reflect a history of reported past losses higher than average.
Deductible plans A form of loss-sensitive workers’ compensation insurance. The employer accepts responsibility for reimbursing the insurer for claims that fall within a specified deductible amount and, in return, gets a discount on the premiums. Deductible plans come in two basic types: small-deductible plans, where the amount per claim is relatively low, such as $1,000, and large-deductible plans, where the amount per claim is typically $25,000 or more.
Deposit Premium: This is the initial premium that was calculated when your policy was issued. This is your first payment for that policy period, but does not cover the first month’s premium. Other payments will be based on the type of payment plan that has been selected.
Direct writer An insurance company that does not work through independent insurance agents. Agents for direct writers are employees of the insurance company. The largest direct writer of workers’ compensation insurance is Liberty Mutual.
Discount ratio In the experience modification rating formula, a factor that is applied to expected losses to determine what percentage of those expected losses should be considered primary losses and what should be considered excess losses.
Dividend A return of premium, calculated after policy expiration, based on the overall performance of the insurance company or of a group of insureds. Dividends cannot be guaranteed in advance, although they may be shown on proposals for insurance estimates.
Dividend plans Insurance policies that return some portion of a guaranteed-cost premium to the employer based on loss experience. Dividend plans used to be much more common, but have been largely supplanted by other types of loss-sensitive plans, such as sliding-scale dividend plans.
Earned Premium: Premium that is calculated and displayed on your final audit statement.
Employee leasing An arrangement by which a professional employer organization provides employees to client companies for a fee. Some leasing companies hire the employees of their client companies and then lease them back to those companies. The leasing companies handle payroll and tax reports and provide workers’ compensation and employee benefit coverages for the employees.
Employers’ liability Insurance that covers an employer’s liability for bodily injury to employees occurring within the scope of their employment when that liability is not covered by the statutory workers’ compensation provisions of the state, in Part Two of the standard workers’ compensation insurance policy, with a dollar limit for the coverage.
Employers’ liability coverage endorsement (stop-gap) A written amendment to an insurance policy that provides employers’ liability coverage for employees in a monopoly state. Monopoly state funds do not provide the employers’ liability coverage provided by Part Two of the standard workers’ compensation policy, so this endorsement extends Part Two coverage to employees covered under such monopoly fund programs.
EMR Experience modification rating. See experience modification factor.
Endorsement A written amendment to an insurance policy. Although the standard workers’ compensation policy tends to provide very broad coverage, some endorsements are commonly used to extend or restrict coverage in certain situations: alternative employer endorsement; employers’ liability coverage endorsement (stopgap); foreign voluntary compensation endorsement; joint venture as insured endorsement; medical benefits exclusion endorsement; partners, officers, and others exclusion endorsement; sole proprietors, partners, officers, and others coverage endorsement; voluntary compensation and employers’ liability coverage endorsement; and waiver of our right to recover from others endorsement.
Exception, standard See standard exception.
Excess liability coverage Insurance that provides coverage beyond the limits of primary insurance, providing catastrophe coverage.
Excess loss In the experience modification factor, the amount of any single claim that exceeds $5,000 (under the National Council on Compensation Insurance rating formula).
Expected loss ratio (ELR) A number calculated by averaging the losses of all businesses in a specific classification in a state per hundred dollars of payroll.
Expected losses Projections of expenses from losses and based on actuarial probability calculations.
Experience modification factor An adjustment to manual premium, calculated by an advisory organization (also known as a rating bureau) such as the National Council on Compensation Insurance, based on historic loss and payroll data of a particular insured. Also known as a modifier (mod), this is a multiplier that is based on a company’s reported workers’ compensation losses. If the losses are lower than average, it might earn a credit modifier. If the past losses are higher than average, it will probably get a debit modifier.
Experience modification rating (EMR) See experience modification factor.
Experience modifier See experience modification factor.
Experience period The window of time from which loss and payroll data is used to calculate an experience modification factor for an employer. Normally this window is a three-year period, starting four years prior to the effective date of the experience modifier. However, rating bureaus do not wait until three full years of data are in the experience period before producing an experience rating for an employer. If an employer reaches a certain, relatively low threshold of workers’ compensation insurance premiums in any one of the three years in the experience period window, this will make that employer eligible for experience rating.
Experience rating The most widely applied adjustment for the manual premium, using the experience modification factor.
Foreign voluntary compensation endorsement A written amendment to an insurance policy that extends coverage to employees who are working outside the country for an extended period. Importantly, this also can include repatriation expense, which can be a significant expense for injured workers who are out of the country.
Fronting An arrangement between two insurance companies to produce an insurance policy (usually workers’ compensation) for a third party wherein one insurance company produces the official policy (for a fee) but cedes all losses from that policy to the other insurer. This kind of arrangement is used in situations where the insurer writing the risk is not an admitted company in a state in which the coverage must be written by an admitted carrier. In order to meet the statutory requirements, the first insurer pays a second (admitted) insurer to “front” the policy, even though the first insurer remains responsible for paying all losses arising under the policy. This kind of arrangement is often used by captive insurers when they are not admitted carriers in a particular state.
Governing Classification The classification code on an employer’s workers’ compensation insurance policy that generates the most payroll. The basic classification, aside from standard exception classifications such as clerical or outside sales (unless there is no other workplace classification applicable other than a standard exception).
Guaranteed-cost plan A worker’s compensation insurance policy that is not subject to adjustment due to losses that occur during the policy term. In a guaranteed-cost policy, the only variable affecting the premium that should change between policy inception and audit is payroll: the premium is adjusted based only on payroll fluctuations, not on the cost of claims incurred or paid our under the policy. This is in contrast to the various kinds of loss-sensitive plans, such as retrospective rating plans, retention plans, or sliding-scale dividend plans, where the premium is adjusted based on losses incurred during the policy term.
Guaranty association An organization in a state that is composed of all the insurance companies providing a specific type of policies within that state, whose purpose is to protect the policy owners of any of its member companies against any losses suffered if their companies become insolvent.
Incidental exposure Liability incurred away from the work site or outside the state of coverage when employees are not engaged in their usual work activities, but are traveling or performing work-related activities.
Inclusion, standard See standard inclusion.
Incurred losses Paid losses plus loss reserves for estimated future claim costs. Many loss-sensitive insurance policies adjust premiums based on incurred losses rather than just on paid losses.
Independent agent An insurance agent who has contracts with multiple insurance companies and can choose which of those insurers to use for a particular client.
Insurance producer See producer, insurance.
Interstate rating An experience modification factor that applies across more than one state. Interstate ratings are calculated by the National Council on Compensation Insurance for employers whose past workers compensation insurance policies show payroll in more than one state. Most, but not all states, participate in the interstate rating system. A few states, such as Michigan, Pennsylvania, and Delaware, do not participate in interstate rating, but instead continue to calculate separate experience ratings for employers who operate in their jurisdictions, even if those employers also qualify for interstate rating. Those employers thus have one experience modifier applying to their operations in most states but a separate modifier calculated by the stand-alone state rating bureau. The separate stand-alone modifier would apply only to workers compensation insurance premiums developed for the employer’s operations in that stand-alone state.
Involuntary market See residual market.
Joint underwriting association An organization of insurance companies that is formed with statutory approval to provide a specific type of insurance, usually because the voluntary market is not meeting a need. Regulators generally permit joint underwriting associations to develop their own policy forms and set their own rates.
Joint venture as insured endorsement A written amendment to an insurance policy that is used when the named insured on the policy is a joint venture. It clarifies that coverage extends to the members of the joint venture, but only regarding their capacity as members of the joint venture. If you also have other business enterprises separate from the joint venture, you will need separate workers’ compensation coverage.
Large-risk alternative rating option (LRARO) A provision of retrospective rating plans developed by the National Council on Compensation Insurance and approved by most states that allows companies with an annual estimated workers’ compensation standard premium above a certain amount to negotiate the factors of their retro plans with the insurance company.
LCF See loss conversion factor.
Letter of credit A financial instrument issued by a bank for a customer that backs payment up to a specified amount, as a guarantee to a creditor, such as an insurance company.
Loss conversion factor (LCF) A number that is multiplied by incurred losses to calculate converted losssies, often used in calculating retrospective rating plans, to cover the expenses of claim adjustments and claim service.
Loss limitation An option in retrospective rating plans that allows the insured – for an additional charge – to place a cap on the amount of any single claim that gets counted in the retro calculation, so that a single very expensive claim doesn’t do too much to raise the retro premium.
Loss-sensitive plan Any of various workers’ compensation policies that adjust the premium based on losses incurred or paid out under the policy. Loss-sensitive plans use the rate times hundred dollars of payroll to calculate premiums, but then make further adjustments based on the losses under the policy. These adjustments may lower premiums if losses are low or may raise premiums even higher than the guaranteed-cAn iost premium would have been if losses are high. The common types of loss-sensitive plans are the retrospective rating plan, the retention plan, the sliding-scale dividend plan, and deductible plans.
LRARO See large-risk alternative rating option.
Manual premium A workers’ compensation premium calculated by multiplying payrolls by appropriate manual rates, before applying an experience modifier, a schedule credit, or a premium discount.
Manual rate An insurance rate contained in a manual published by an insurance company or a rating bureau for a unit of insurance. The manual rate for a workers’ compensation plan is the rate that the insurance company applies to all insureds in a state for a particular classification. The manual rate is a starting point for calculating premiums, before any adjustments.
Maximum premium factor A ceiling set on the premium for retrospective rating plans, usually as a percentage of the standard premium, to limit exposure no matter how high the claims cost ultimately go.
Medical benefits exclusion endorsement A written amendment to an insurance policy that is used in states that allow employers to pay medical benefits directly, instead of through a workers’ compensation policy. This endorsement excludes medical benefits for specified states and makes the employer responsible for payment of these benefits.
Medical-only claims Claims for which the only cost is medical care, without any lost-time benefits being paid.
Merit rating A premium adjustment used in some National Council on Compensation Insurance states for employers too small to qualify for an experience modification factor. Based on prior claims (or lack of claims), it provides either a credit to adjust the premium downward or a debit to adjust the premium upward.
Minimum premium factor A floor set on the premium for retrospective rating plans, usually as a percentage of the standard premium, no matter how low the claims cost may be.
Modified premium Workers’ compensation premium calculated after the application of an experienced modification factor. It is similar to standard premium, but it does not reflect any schedule credits or debits.
Modifier (mod) See experience modification factor.
Monopoly/monopolistic state A state that requires all workers’ compensation insurance to be placed with its state fund and does not allow any private insurer to write workers’ compensation coverage. Monopoly state funds do not provide the employers’ liability coverage provided by Part Two of the standard workers’ compensation policy, so an employers’ liability coverage endorsement (stopgap) extends Part Two coverage to employees covered under such monopoly fund programs.
Named insured An individual or entity that is specified by name in the declarations of a policy as insured by that policy. The named insured is responsible for paying the premium.
National Council on Compensation Insurance (NCCI) The organization responsible in many states for determining proper workers’ compensation classifications, calculating experience modification factors, and collecting data used for ratemaking. NCCI also writes the manuals used in many states to calculate workers’ compensation premiums, and also administers the assigned risk plan in many jurisdictions. NCCI is a private organization, not connected with government, although it is often mistakenly thought to be a governmental agency.
NCCI See National Council on Compensation Insurance.
NOC Not otherwise classified, a term used in the classifications section of workers’ compensation rating manuals, to indicate a classification to be used if a company cannot be classified more specifically.
OCIP See owner-controlled insurance program.
Other states insurance Coverage of the insured company if it expands its operations into states not declared when the policy was issued or renewed. If the company elects this coverage and then begins operating in a state listed under “other states,” the insurer provides the same coverage as if the state had been declared in the policy when it was issued.
Owner-controlled insurance program (OCIP) See consolidated insurance program.
Paid-loss retrospective plan A retrospective rating plan for which the premium is calculated based on paid losses (the losses ultimately paid under that policy), not incurred losses (paid losses plus loss reserves for estimated future claims costs).
Paid losses Losses ultimately paid under a policy, in contrast with incurred losses, which also include loss reserves for estimated future claims costs.
Partners, officers, and others exclusion endorsement A written amendment to an insurance policy that is used when partners and executive officers wish to exclude themselves from coverage and thus exclude their remuneration from premium computation.
Payroll: Payroll also known as remuneration. Includes monies paid to your employees and contractors. Including: bonuses, commissions, overtime pay, holiday pay, vacations & sickness, money for piece work, and other money substitutes. State exceptions may apply.
Physical Audit: Physical audit performed on-site at your company
PEO See professional employer organization.
Pool See assigned risk plan.
Premium auditor Someone who is responsible for determining actual exposure (remuneration) for a policy period, in order to determine the final audited premium. The auditor typically works either directly for the insurance company or for a third-party company retained by the insurance company.
Premium discount A premium credit, based on size of the premium paid. It is normally given automatically on voluntary market policies, although retrospective rating plans and sliding-scale dividend plans usually do not have a premium discount. Also known as sliding-scale discount.
Primary loss In the experience modification factor, the first $5,000 of any single loss (under the National Council on Compensation Insurance rating formula).
Producer, insurance An agent, a broker, or any other person who is directly involved in the sale of insurance.
Professional employer organization A company that contractually assumes many of the rights, responsibilities, and risks of an employer – payroll management, benefits, unemployment insurance, and workers’ compensation administration.
Rate The cost per unit of coverage that is applied to the rating basis (e.g., payroll) to determine the premium for the policy period.
Rating bureau An organization formed to collect actuarial data, survey risks, and develop rates. See National Council on Compensation Insurance. Some states maintain their own separate rating bureaus, although these often follow NCCI rules and use NCCI manuals. Currently, California, Delaware, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, and Pennsylvania operate their own non-NCCI rating bureaus. Many of these largely follow NCCI rules for computing premiums and classifications, but California, Delaware, Texas, and Pennsylvania are notably different from NCCI in some aspects of classification and premium computation. See advisory organization.
Remuneration The basis for calculating a workers’ compensation premium. Remuneration is primarily payroll, but may also include other forms of employee compensation. Workers’ compensation premiums are computed by applying varying rates (for different classifications) per hundred dollars of remuneration.
Rent-a-captive An arrangement by which an organization obtains the benefits of a captive insurance company, without the upfront costs and capital investment required to form its own captive, by leasing the capital base of a captive insurer. Also known as non-owned captive.
Reserves Funds that an insurance company sets aside to ensure that it can cover its estimate of the ultimate cost of claims.
Residual market Any insurance mechanism designed to assume risks that are considered generally unacceptable in the normal insurance market, such as assigned risk plans and government insurance programs.
Residual market system The particular mechanism that a state uses to make sure that employers can get workers’ compensation coverage, usually an assigned risk plan.
Retention plan Similar to a retrospective rate plan, a workers’ compensation policy formula that adjusts the premium up or down, based on losses (and associated costs) that occur during the policy period.
Retrospective rating plan A workers’ compensation insurance policy that makes a subsequent adjustment to premium, after policy expiration, based on losses generated during the policy period. The adjustment can go up or down, within set parameters, based on those losses.
Return-to-work program A system of getting an injured worker back in action as soon as possible, either to his or her original job, with some restrictions according to the injury, or to a temporary alternate job that accommodates his injury. Also known as modified work or light duty policies.
Schedule credit or debit A discretionary premium adjustment (credit, downward; debit, upward) based on underwriters’ evaluation of specific characteristics of a risk not reflected in the experience modifier.
Scopes® Manual The Scopes® of Basic Manual Classifications, produced by the National Council on Compensation Insurance, a guide that details which kinds of workplace exposures belong in particular workers’ compensation classification codes. Also known as the Basic Manual.
Short rate penalty A penalty applied by insureds when a workers’ compensation insurance policy is cancelled by the insured before the expiration date of the policy. This penalty is steep in the early days of the policy and gradually tapers off the closer the policy gets to the expiration date.
Single enterprise rule A principle of classifying employers that states that it is the overall business of the employer that is classified, not necessarily each and every job function done there.
Sliding-scale discount See premium discount.
Sliding-scale dividend plan A workers’ compensation plan that provides a return of premium, after policy expiration, based on the actual loss experience of the insured business. The size of the dividend, generally expressed as a percentage of the premium, varies with the actual loss ratio of the insured business.
Sole proprietors, partners, officers, and others coverage endorsement A written amendment to an insurance policy that extends coverage to sole proprietors, partners, and officers who are not required to be covered but who choose to extend coverage on themselves.
Standard exception A classification of employees that is normally not included in the governing classification. Standard exceptions include clerical, outside sales, and often (but not always) drivers.
Standard inclusion A type of activity work that is not broken out into a separate classification, under National Council on Compensation Insurance rules. For example, maintenance people in a manufacturing plant would not be broken out into a separate classification but would be included in the manufacturing classification that applies.
Standard premium The premium after application of the experience modifier and any schedule credit or debit, but before the premium discount.
Subcontractors Also known as “independent contractors.” Work Comp laws hold a business owner responsible for employees of uninsured subcontractors — they are treated as if they are your own employees. Subcontractors can get coverage thru their insurance broker. Business owners must retain copies of the work comp insurance certificates.
Subrogation The action of an insurance company, after paying a claim for an insured company, to recoup all or some of the amount paid by making its own claim against one or more third parties that may have caused the loss or contributed to it.
Surety bond A guarantee by a corporate insurer to pay if the company that purchases the bond defaults on its obligation to cover claims.
Tax factor A factor applied in retrospective rating plans to cover the insurer’s costs for licenses, fees, assessments, and taxes that it must pay on the premiums that it collects. The factor varies by state and is sometimes a composite of two or more state factors. States also charge taxes on premiums for guaranteed-cost policies, but insurers build these taxes into their rates for guaranteed-cost policies, rather than calculating them separately as for retro policies. Also known as a tax multiplier.
Third-party administrator A claims administrator or insurance company that processes workers’ compensation claims on behalf of a self-insured organization.
Umbrella liability coverage An insurance policy that supplements a primary or underlying liability policy by providing high excess coverage over the primary or underlying policy, broader coverages than the primary policy, and automatic replacement of coverage provided by underlying policies in case their coverage is reduced or depleted by losses.
Unallocated loss adjustment expenses Charges for costs that are not associated with specific claims.
Unit statistical report (unit stat report) A printed form or electronic file for each employer by the National Council on Compensation Insurance or a state workers’ compensation rating bureau that contains all the information (payroll and claims) necessary for calculating a workers’ compensation experience modification factor for that employer. Also known as a unit statistical filing.
Voluntary compensation and employers’ liability coverage endorsement A written amendment to an insurance policy that extends coverage to certain employees who are not required to be covered by for workers’ compensation benefits in a state, such as domestic or farm workers and commission-only salespeople. This endorsement obligates the insurance company to pay, on behalf of the insured, compensation benefits equal to those to which those employees would be entitled if they were covered by the workers’ compensation law of that state.
Voluntary market The world of insurance in which companies are free to select insurance providers and negotiate plans and in which insurance providers are free to deny coverage, in contrast with an assigned risk plan, in which a state ensures coverage of companies unable to secure coverage in the voluntary market.
Waiver of our right to recover from others endorsement A written amendment to an insurance policy that stipulates that the insurance company waives its right of subrogation against third parties who may be responsible for some losses under the policy. This endorsement should name the particular parties who are covered by this waiver
Workers’ ompensation insurance Insurance that covers an employer’s responsibility to compensate employees for injuries, illnesses, disabilities or death, as prescribed by the workers’ compensation laws of the specific state.