Workers' Compensation Insurance
In Mississippi, Workers' Compensation (WC) Insurance is required by companies with five or more employees. This insurance covers injury that occurs while working on the job. It does not matter if the employee or employer was at fault in causing the injury. WC Insurance pays for medical costs to return the injured employee as near to their original health as possible and pays their salary while out of work due to the injury. The amounts paid are fixed by law for specific permanent injuries.
Acquiring WC Coverage
Usually an employer will first try and obtain WC insurance in the voluntary market through an insurance company that is willing to write a WC policy to cover his business. Since an employer is required to have workers' compensation insurance by law, there needs to be a means to provide WC coverage if they cannot find insurance in the voluntary market. This is the purpose of the Assigned Risk (A/R) pool. If an employer seeking WC insurance in Mississippi is turned down by two insurance companies, then the employer's company can be "pooled" with other similar risks and assigned (i.e. an "assigned risk") to an insurance Servicing Carrier. The Servicing Carrier issues WC A/R policies, collects premiums, pays losses, and provides WC programs to help reduce losses. All assigned risk premiums go into the assigned risk pool fund and all assigned risk losses are paid from this fund. If losses and expenses turn out to be greater than the premium for all the policies written in a year, all companies writing any WC in the voluntary market in the state for that year make up the difference through assessments.
Lowering A/R Rates
The premium rates charged for WC A/R insurance policies are based on prior losses in the A/R pool. The actual premium paid is based on the rates, the size of the employer's payroll and their prior losses. The best way to reduce the premium rates is to reduce the losses. Effective safety programs help prevent losses as well as minimize the severity of losses that do occur.