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The Basics of the WCJUA

The Basics of the WCJUA

Every state has laws for businesses regarding Workers Compensation insurance. What these regulations don’t take into account is how difficult it is for certain industries to obtain coverage. Fortunately, state labor departments and insurance departments have created Workers Compensation Joint Underwriting Associations (WCJUA) to handle hard-to-place policies. What is the WCJUA? The WCJUA or JUA goes by different names in different states. It may also be called the high risk pool, a residual market or an assigned risk plan. Insurance companies that do business within your state are required to write a certain percentage of high risk customers. These companies may split the risk with other insurance companies contracted to write these businesses. JUAs are heavily regulated by the state and require strict application and underwriting procedures. Because of the typically high risk nature of JUA customers, premiums are higher than in the open market. Who Needs the JUA? A JUA is almost never the first stop for any business, and is usually the insurer of last resort for employers. You may need the JUA if you fit into any of the following categories: High number of high payment claims. High risk industry (for example: roofers, tree trimmers, circus, skydivers, etc.) Chronic premium payment issues. Small number of employees. New business owner with no prior industry experience. Your insurance broker may be required to submit your application to at least three other open market insurers and receive declinations prior to submitting an application to the JUA. What To Expect The WCJUA is much the same as any other workers compensation insurer in that they offer both employers liability coverage...