15 Terms to Know When Renewing Workers Compensation Insurance


The insured person is the business or entity involved in an insurance relationship that is protected under the policy. The insured can be an individual, a business, or a non-profit organization.


The Insurer is a term referring to the insurance carrier who is offering coverage under the policy.

Additional Insured

An additional insured is anyone, other than a policyholder, who is also covered by an insurance policy. This coverage may be limited to a single event or in some instances it lasts the lifetime of the policy.


The Insurance Carrier is the company who is providing the protection provided under an insurance policy. Some carriers have only captive agents who offer only their products while others partner with independent insurance agents who sell the products and services of many carriers. The carrier is responsible for processing a claim, not an insurance agency.


The underwriter is the person within the carrier who makes a decision to offer coverage or not, and what to charge for that coverage. They make this decision based upon the policies of the state they are offering coverage in and the appetite of the carrier they work for.


The agency is the business that helps individuals and businesses decide which types of insurance are best for their situation. The agency acts as a middle man who sells the products and services of a carrier. They do not service the policies when a claim arises. It is a good idea to keep your agent in the loop when a claim arises so they can hold the carrier accountable if they do not live up to their end of the policy terms.


The term producer, also referred as the agent, is the salesman in charge of finding the proper products and services for both individuals and businesses. The producer is your first point of contact between the insurer and the insured.

Named Insured  

Any person, business or non-profit organization who is specifically named as an insured on the insurance policy. It is important to realize that this is different from entities who are unnamed but may fall within the policy definition of an insured.

Date of Injury (DOI)

The term date of injury refers to the date the injured employee first experienced an injury. If there was an incident, it is the date of the incident, but for long term use injuries this is the date the injury was brought to the attention of the business or organization.

First Report of Injury

The first report of injury is a form a business must fill out during the workers compensation process. This term refers to the date the employee first reports an injury to their superior. This may be the same day as the date of injury, but it also may be at a later date. It is important to develop some type of incident report and require managers to fill them out any time there is

National Council on Compensation Insurance (NCCI):

NCCI is the term that refers to the National Council on Compensation Insurance. NCCI gathers data, analyzes industry trends, and provides objective insurance rate and loss cost recommendations to the states it partners with. States that use NCCI typically enjoy lower rates on workers compensation insurance premium.

Experience Modification Rating

The experience modification rating is a term that refers to a number used by insurance companies to gauge both the past cost of injuries and the future chances of risk. This rating has a strong impact on whether a business will be offered workers compensation insurance coverage and what the carrier will charge for that coverage.

Loss Ratio

The loss ratio is a ratio of the insurance claims paid by an insurer in relation to the premiums earned from the insured. It is usually calculated over a one-year period.

Hammer Clause

A ‘Hammer Clause‘ is a provision within an insurance policy. The provision gives the insurer the right to settle an insurance claim for an undisclosed amount. If the insured decides not to agree with the settlement they must take on some of the risk involved with moving forward without a settlement. On some policies, the insured takes on all of the risk, but most of the time the amount is either 70/30 or 50/50.

Assigned Risk Provider

The assigned risk provider is commonly referred to as the pool or the state fund. This term applies to a workers compensation system. In the United States, the workers compensation insurance systems are governed by the state and not the federal government. Each state provides for a provider of last resort. This provider of last resort provides workers compensation coverage for businesses that cannot find coverage on the open market. In some instances, the business cannot find coverage because of the industry the business operates. In other circumstances, the business cannot find coverage because of their claims history (the business has a lot or a severe claim on the record). The Assigned Risk Provider offers coverage almost always at a higher rate then the open market. In most states, once you are in the pool you must stay in the pool for 2-3 years.

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