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Increases in costs expected for workers compensation insurance policies

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Workers compensation insurance policies are required in many states, and companies with the policies may be experiencing some rate hikes in the upcoming months, Crain Communication publication Workforce reported.

The news source said experts believe the increased rates are a result of rising claims costs and the deteriorating combined ratios of insurers. Underwriting is also expected to change as many insurers are planning to tighten standards to improve profitability. 

"They are actually underwriting and looking at losses," Bob Jacobsen, area vice president for a Chicago-based insurance firm, told the new source. "The discipline is certainly back in the marketplace and, unfortunately for buyers, that means they are all going to pay more, at least in the guaranteed-cost market."

Jacobsen told the source guarantee-cost accounts are expected to grow 5 to 7 percent, while certain accounts in the Midwest could increase up to 10 percent.

Employers want to stay out of lawsuits with their injured employees, which makes workers compensation attractive for businesses, even if states don't require the policy. Despite the potential costs increases, all employers should consider the policies.

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