Glossary

Assigned risk plan

A state-run residual market that provides workers' compensation to employers that cannot buy it from an insurer in the voluntary market.

Also called: workers' comp assigned risk, residual market plan, market of last resort, assigned risk pool

An assigned risk plan is the market of last resort for workers' compensation. An employer turned down by voluntary-market insurers because of poor loss history, a hazardous class, or a lapse in coverage can apply to the plan, which assigns the business to a servicing carrier that must issue the policy. In many states the plan is administered through NCCI; others run their own plans or use a state fund of last resort.

Coverage is statutory workers' comp, but it is often priced above the voluntary market, and the rules differ by state. Some plans add surcharges or require a deposit or an installment schedule. Employers liability coverage may come with the policy or need to be requested separately, and coverage is usually written one year at a time.

Treat the plan as a bridge. Clean up open claims, correct the class code assignment, fix the safety problems behind your losses, and have your broker market the account to voluntary carriers as soon as your experience improves. Employers in the four monopolistic states buy from the state fund instead. See the assigned risk guide for how to qualify, apply and get out.

Last reviewed October 10, 2026

In the index now

Related terms

Monopolistic state fund A government-run workers' comp fund that is the exclusive source of coverage in its state; employers buy from it or self-insure, not from private carriers. Experience modification rate (EMR) A multiplier on workers' compensation premium comparing an employer's actual claim losses with the losses expected for its industry and size. Class code The numeric code that classifies a business's operations for rating, setting the workers' compensation rate per $100 of payroll. Pay-as-you-go A workers' comp billing arrangement where premium is calculated and paid each pay period on actual payroll, rather than as a large deposit trued up at audit. Workers' compensation State-mandated no-fault insurance that pays medical care and part of lost wages for work-related injuries, in exchange for limits on employee lawsuits.

Related guides

Declined for coverage? Where hard-to-place businesses find insurance Why standard insurers decline some businesses and where to go next: surplus lines, assigned risk, FAIR Plans, risk retention groups and fixes that work. The largest workers' comp insurers (2025) The 25 largest U.S. workers' compensation insurers by 2025 direct premiums written, from NAIC data, and what the ranking means for employers. Assigned risk and residual markets for workers' comp How the workers' comp residual market works when no voluntary insurer will write you: who qualifies, what it costs, how plans differ by state and how to exit. Workers' comp for small businesses When a small business must buy workers' comp, how owners, family and subcontractors count, how small employers are priced, and ways to keep the bill manageable. Workers' comp requirements by state: who must carry it Comp thresholds, owner exemptions, monopolistic states, the Texas opt-out and penalties for going uninsured, with a table covering all 50 states and DC. Workers' compensation insurance: how it works What workers' comp pays, who must carry it, how premium is built from payroll, class codes and the experience mod, and what the policy's three parts do.

Related insurers

AF Group (Accident Fund) Lansing, Michigan workers' comp specialist (Accident Fund, United Heartland, CompWest) owned by Blue Cross Blue Shield of Michigan; sale to Enstar pending. Liberty Mutual Boston-based mutual and No. 3 U.S. business insurer. Leading surety writer, sells small business coverage through independent agents and E&S via Ironshore. New York State Insurance Fund (NYSIF) New York's state agency fund for workers' comp, disability and paid family leave. It competes with private carriers and must take any employer that applies. Old Republic Chicago-based specialty group (NYSE: ORI) behind Great West trucking, Bitco construction, PMA comp and large-deductible programs; No. 4 in U.S. commercial auto.

Related tools

Workers' comp and benefits requirements by state Look up one state's workers' comp threshold, disability and paid leave programs, auto minimums and regulator, or compare two states side by side.

Related en español

Compensación laboral para pequeños negocios Cuándo un negocio pequeño debe tener compensación laboral, cómo cuentan dueños, familiares y subcontratistas, cómo se tarifica y cómo controlar el costo. Seguro de compensación laboral: cómo funciona Qué paga, quién debe tenerla, cómo se calcula la prima con nómina, códigos de clase y factor de experiencia, y qué hacen las tres partes de la póliza.