Seven Questions to Ask Before Recommending a Workers’ Comp Product
Quick summary
- Start with the client’s priorities—not the product names.
- Clarify risk tolerance, cash-flow needs, loss performance, and financial capacity.
- Use the answers to narrow the conversation to guaranteed cost, an incurred or paid loss retro, or a large deductible plan.
- Confirm eligibility, availability, and plan details with your Summit underwriter.
Choosing the right workers’ comp product takes more than comparing premiums. These seven questions can point you toward the right fit.
1. How important is cost certainty?
If the client wants a straightforward premium structure and minimal exposure to claim-driven adjustments, a guaranteed cost plan may be the natural starting point. Premium can still change with audited payroll, but losses during the policy term do not directly adjust the premium. The carrier assumes the claims risk and administrative burden.
2. How much risk is the business willing and able to assume?
Wanting more control is not the same as being prepared to shoulder more risk. Ask what the business could comfortably absorb during a difficult loss year. Incurred and paid loss retrospective plans use minimum and maximum premium parameters, while large deductible plans place substantial responsibility on the policyholder.
3. What does the client’s recent loss experience show?
Loss-sensitive plans can reward favorable claims performance, so review more than just the total number of claims. Consider recurring injury patterns and the corrective actions the client has taken. A client with strong results and a disciplined approach to prevention and claim management may be better positioned for a retro or large deductible plan than one relying on a single good year.
4. How advanced are the client’s safety and return-to-work practices?
A loss-sensitive plan makes the connection between claims and cost more immediate. Ask how the business trains employees, addresses hazards, reports injuries, directs medical care where permitted, and brings injured employees back to productive work. A written program matters, but consistent execution determines success.
5. Is conserving cash a primary goal?
A paid loss retro can provide a cash-flow advantage, because the policyholder pays a smaller upfront premium and reimburses claims as they are paid. A paid large deductible plan also allows the carrier to pay claims within the deductible and bill the policyholder for reimbursement. These structures may conserve cash, but they also require the ability to meet ongoing claim obligations.
6. Can the business meet security and claims-funding requirements?
Financial readiness can determine whether a product is practical. Paid loss retro plans require a claims fund and security. Large deductible plans also require security, and the incurred version requires a loss payment fund. Discuss cash, a letter of credit, or a bond early so an attractive concept does not become an unworkable proposal.
7. Is the account single-state or multistate, and does it meet the premium threshold?
Product eligibility can quickly narrow the options. Summit retrospective plans are only available for single-state policies. Paid loss retro plans generally require at least $25,000 in standard premium. Large deductible plans are designed for very large accounts, require between $100,000 and $500,000 in estimated standard premium (depending the state), and can accommodate multistate exposures.
Turn the answers into a product conversation
- Guaranteed cost: Start here when consistent premium and minimal retained risk matter most.
- Incurred loss retro: Explore this option for a safety-focused, risk-tolerant single-state business that wants its premium to reflect incurred losses while operating within a minimum and maximum premium range.
- Paid loss retro: Consider this for a financially strong single-state business that values cash flow and can fund claims, security, and variable monthly payments.
- Large deductible: Discuss this with a financially robust business that meets the premium threshold, can provide security, and wants substantial risk retention with protection above the deductible.
Talk to your Summit underwriter
For more information or help identifying the right workers’ comp product for your client, talk to your Summit underwriter.
Product availability, eligibility, and plan terms vary. Coverage is summarized. Refer to the actual policy and applicable endorsements for terms, conditions, limits, and exclusions. Contact your Summit business developer or underwriter to discuss the potential client.