In states that allow employers to self-insure their workersâ€™ compensation liability, a security requirement is set for the applicant at the same time the state agency gives its absolute approval. Most times, the employer chooses to satisfy this requirement by purchasing a Self-Insurance Bond. Itâ€™s the quickest, most cost-effective way to provide the state with what it requires, when needed, without tying up capital.
Just recently, the Workers Compensation Board (WCB) in the state of New York released a report this year on other funding models for workers compensation self-insurance based on an instruction from a 2007 law. At the present time, New York requires approved self-insurers to put forward security for their liabilities, which can be met with a surety bond. The report proposes moving from personal security deposits to a guarantee fund, eliminating the need for bonding. SFAA believed that this was a constructive progression based on the fact that it was restricted and preserved the opportunity of self-insuring individually. The AIA local counsel has informed SFAA that the reportâ€™s proposition for self-insurance plans may be handled in 2009.