WCW Blast Vol 5: Exploring State Funds in Workers’ Compensation Insurance

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Welcome back to another WCW Blast with Jeremy from Ochsner Insurance! Today, we’re diving into the world of state funds in workers’ compensation insurance. So, buckle up and let’s get started!

Understanding State Funds

First off, let’s clarify what state funds are all about. In certain states, employers have the option to purchase workers’ compensation insurance from state-operated funds. While it’s not mandatory to buy from these state funds, they offer an alternative to private insurance companies.

The States with State Funds

Here’s a quick rundown of the states where you’ll find these state funds:

If your business operates exclusively in one of these states, you have the option to purchase your workers’ comp insurance from the state fund.

Pros and Cons of State Funds

Now, let’s weigh the pros and cons of opting for a state fund:


  • Potential Cost Savings: State funds may offer competitive rates compared to private insurers.
  • Accessibility: State funds provide an accessible option for businesses, especially smaller ones or those in high-risk industries.
  • State Oversight: With state-operated funds, there’s often a level of government oversight, which can provide assurance and regulatory compliance.
Warehouse: Forklift hits worker on the floor


  • Service Quality: Service levels can vary from state to state and may not always match the level of service provided by private insurers.
  • Claims Handling: Depending on the state fund, claims processing and handling may not be as efficient or streamlined as with private insurers.
  • Agent Commissions: Agents may receive lower commissions for policies sold through state funds, potentially impacting the level of service they can provide.
  • Risk Management Tools: Are there industry experts on staff to be able to assist with baseline risk assessments and provide risk management recommendations with the agent?  Typically, best-in-class risk management professionals can be hired via brokers to assist with assessments and risk management action plans.  Depending on the size of the business, this could be an incredibly important factor!

Making Informed Decisions

When considering whether to opt for a state fund or private insurance company, it’s essential to weigh these factors carefully. Consider the level of service, claims handling efficiency, risk management objectives of your company, and overall cost-effectiveness for your specific business needs.

Conclusion: Empowering Your Insurance Choices

And there you have it, folks! A comprehensive look at state funds in workers’ compensation insurance. Whether you choose a state fund or private insurer, the key is to make an informed decision that aligns with your business goals and priorities.

Thanks for tuning in to this WCW Blast. Join us next week for more valuable insights and tips to navigate the complex world of insurance with confidence. Until then, here’s to your success and prosperity!

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