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Workers Compensation Catastrophe Cover

Definition of "Workers compensation catastrophe cover"

Sandra Garlitz
  Coldwell Banker

Excess coverage for employers who use self insurance for routine workers compensation risks. Many employers consider workers compensation exposure to be routine and predictable and set up a fund to pay these losses themselves rather than trade premium and claims dollars with an insurance company. To supplement a self-insurance program, an employer may buy insurance for catastrophic loss above a certain limit. A stop loss aggregate contract will pay all losses in one year over a specified dollar limit. A specific excess contract pays losses over a stated limit per accident.

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