Benefits of Choosing a Loss Sensitive Workers’ Compensation Plan

There are many different types of workers’ compensation plans from which to choose, but a good deal of employers opt for a loss sensitive plan.

How a Loss Sensitive Plan Works

With this type of plan, business owners will pay premiums based on the actual losses incurred during a specific time period. For example, if no loss incidents occur during that period, the employer will only have to pay a set minimum premium. But if losses do occur, premiums will rise and the employer will have to pay more for that period.


This is a great way to give companies an incentive to keep incidents in the workplace as low as possible. Employers who focus on safety and best practices across the board will generally benefit from loss sensitive workers compensation plans. While there will always be a minimum premium to be paid even when no losses occur, the risk will be spread out based on the true number of loss events.

These types of plans enable employers to focus on risk management and to spread out the cost of workers’ compensation claims to make payments and liability easier to manage. That makes them appealing in terms of balancing out insurance costs over time, especially when the focus is on prevention of unsafe work practices throughout the year.