If your company has a self-insured workers’ compensation plan or a large deductible workers’ compensation plan, you assume many risks and accumulate the liabilities. The liabilities that you have can impact your balance sheets. To eliminate the liabilities, you may want to consider loss portfolio transfers or LPTs.
What Is an LPT?
Some insurers provide solutions such as LPTs. In a loss portfolio transfer, you transfer your liabilities to an insurer and the insurer provides you with a fixed premium. This can help your business if you have outstanding loss liabilities. This is a financial transaction where the insurer will typically offer a premium that is less than the amount you expect to pay.
How Does an LPT Benefit Your Business?
An LPT can benefit your business in a variety of different ways. First, it allows you to transfer liabilities into a fixed and predictable payment. You can also reduce your administrative costs and any future assessments. If you had to put up collateral to the state, the state might release the collateral once you have a loss portfolio transfer.
When it comes to your company, finding ways to strengthen your balance sheet is important. A loss portfolio transfer can help your organization free up cash flow and eliminate the uncertainty of your workers’ compensation liabilities.