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How Public Entities Can Benefit from Combining Workers’ Compensation and Liability Coverage Under One Policy

When multiple lines of coverage are placed with one carrier, it can strengthen a relationship, leading to better solutions for an insured. We review several of the benefits offered to public entities.

May 7, 2024

Comprehensive coverage can offer carriers a more in-depth perspective in the underwriting process. For public entities seeking to combine coverages, operational efficiencies are certainly motivating reasons, but there are many other benefits to consider.

“Public entities can have additional lines of business included in one retained limits policy, including law enforcement liability, public officials’ liability, and educators’ legal liability,” said Susan Kostro, Director – Public Entity Underwriting. “The integration of additional lines can help prevent coverage gaps, lead to shorter, more manageable policies, and provide a sense of confidence for the insured.”

These are just a few of the benefits offered by placing multiple coverage lines with a carrier.

1. Strengthens Carrier Relationship

Establishing well-developed, meaningful communication is essential to a mutually beneficial insured and carrier relationship. When multiple lines of coverage are included in a policy, it can strengthen the relationship to incorporate the goals of both parties. For example, an underwriter from an existing policy can help explain what combining coverage might look like and how it could potentially balance an organization’s lines more effectively.

2. Provides Stronger Risk Management

Multiple coverage placements open up opportunities to fund risk management products, both internal and external, that will benefit the entire account across all lines of business. This renewed commitment to risk management allows a carrier to provide risk control resources that are specific to an insured’s needs. For example, if a carrier notices that a public entity is struggling with injuries related to vehicles, they can help develop training strategies and work with external vendors who have advanced technology to prevent motor vehicle incidents. That vendor may also have a strategy for reducing general liability claims with the same technology, offering extended solutions for an insured.

3. Allows Dispersed Risks

One very large excess workers’ compensation claim may typically appear as a red flag, but when a public entity holds multiple lines of coverage, it is easier for a carrier to look at risks holistically and reconsider a claim’s impact. Occasionally, there may be more efficiencies in casting a wider net of coverages, allowing a carrier to spread the risk more evenly, which might result in fewer penalties for the insurance buyer if one line underperforms. For instance, if one line incurs a large frequency of claims, but another line is stable with little-to-no claims incurred, it could create a balance that might not affect future rates or insurability.