What is excess workers’ compensation?

It is a policy bought by employers that self-insure their workers’ compensation, written above the program’s self-insured retention (SIR). It is not a layer on top of a standard guaranteed-cost workers’ comp policy.

What’s the difference between specific and aggregate excess?

Specific excess attaches above a per-occurrence retention on any one claim. Aggregate excess attaches above an annual retention on the total of all claims in the policy year.

Is excess workers’ comp the same as umbrella insurance?

No. An umbrella attaches above employers’ liability (Part Two of a workers’ comp policy) and never above the statutory benefits in Part One. Excess workers’ comp is written specifically for self-insured programs.

Generally employers with sufficient payroll, stable loss history, financial capacity for an SIR, and approval as a self-insurer in each state where they self-insure. A TPA and sound safety program are typically required. Several states make excess coverage a condition of that approval; Texas, for example, requires certified self-insurers to carry a specific excess layer of at least $5 million per occurrence.

How is pricing determined?

Underwriters evaluate payroll by class/state, multi-state exposure, historical paid/open losses, chosen SIR/aggregate retentions, industry risk, and program controls (TPA, loss control, return-to-work).

Self-Insured Workers' Compensation

Excess Workers' Compensation

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About Excess Workers' Compensation

What self-insurance is

Self-insured organizations retain part of their workers' compensation risk and pay claims as they occur, instead of buying a guaranteed-cost policy. Large employers, public entities, and self-insurance groups and pools use it.

How excess workers' compensation works

A self-insured program sets a self-insured retention (SIR), the amount it pays on each claim. Many programs also set a separate aggregate retention, the total it pays across all claims in a policy year. Excess workers' compensation is written above those retentions, as a specific (per-occurrence) layer, an aggregate (annual) layer, or both.

Excess workers' comp is for qualified self-insured programs. It is not an add-on layer above a guaranteed-cost workers' compensation policy, and large-deductible programs do not buy it: there the carrier of record is primary and the deductible is reimbursed to it. If you are not self-insured, see workers' compensation.