What does assigned risk provide coverage for?

Assigned risk programs are designed specifically to provide coverage for companies that are classified as high risk and are unable to obtain insurance through the standard market. This situation often arises for businesses that have a history of previous claims, operate in high-risk industries, or are new without established loss experience. The assigned risk system ensures that these companies have access to necessary liability insurance, thereby allowing them to operate legally and protect their assets.

By participating in an assigned risk program, insurers can distribute the risk among themselves. This setup helps ensure that all businesses, regardless of risk level, can find coverage in the insurance marketplace. It ultimately aims to maintain stability in the workforce and protect employers from the financial repercussions of accidents or incidents that may occur in their operations.