Workers’ Compensation 101

Workers' compensation insurance hero

Question 8

How do you purchase coverage?

Employers can purchase coverage by utilizing the services of a licensed agent/broker to place the insurance with a private carrier or through private insurance companies directly.



  1. New employers and those businesses considered “high risk” where coverage is not available through a private insurance company can purchase coverage from:

    • Competitive State Funds – run by a state to provide coverage
    • Assigned Risk Plans – a pool of private carriers required to insure certain amounts of high-risk clients
  2. In “Monopolistic States” – Ohio, North Dakota, Wyoming and Washington – coverage is only available from a state-operated plan

  3. Self Insurance – Typically reserved for larger businesses that have the financial capacity to directly pay workers’ compensation claims. There are significant collateral requirements imposed by states for companies to qualify as a self-insurer.

Next Question: Is there an audit process for workers' compensation policies?

The information contained in this website represents the products and services available through one of the business groups of Automatic Data Processing Insurance Agency, Inc. (ADPIA). ADPIA services mid and large size clients with various insurance products and services through its other business groups.

All insurance products will be offered and sold only through Automatic Data Processing Insurance Agency, Inc., its licensed agents or its licensed insurance partners, 1 ADP Blvd., Roseland, NJ 07068. CA license # 0D04044. Licensed in 50 states. Automatic Data Processing Insurance Agency, Inc. is an affiliate of ADP, LLC. Certain services may not be available in all states. Certain services are provided through the carrier partners and an additional carrier fee may apply. ADP and the ADP Logo are registered trademarks of ADP, LLC. Copyright © 2016 ADP, LLC.