Work Comp Premium Deductibles

Unlike a guaranteed program (like most State funds), with a work comp deductible element on a policy or PEO program you agree to pay a specific amount of money out-of-pocket when you file a covered claim.

For example, one of your employees has an accident, and the accident will cost the insurance company (or PEO) $5,000. If you’ve set your deductible at $500, then you’ll pay the first $500. The workers’ comp insurer pays the remaining $4,500. Alternatively, if your employee’s accident results in $500 worth of comp costs (or less), you’ll pay the entire workers’ comp claim.

A lower deductible means you’ll be spending less out-of-pocket, but your actual workers’ comp rate per code is usually higher.  By the same logic, increasing your deductible can usually help bring your premiums down.