A Loss-Sensitive Rating Plan (LSRP) is intended to encourage policyholders to promote safety and minimize losses, to incentivize those with good loss histories by charging them lower premiums, and to make companies with poor loss histories pay more for coverage.
These programs are particularly appealing to companies that want to reap the financial benefits of establishing and enforcing a serious enterprise risk management program that yields lower risk and fewer claims. There are several methods used to apply loss sensitivity to your insurance program and premiums.
You could opt for an Aggregated Program that applies an annual aggregate deductible to your claims, or you could choose a Retrospective Rating Plan that reimburses you for premium overpayment if you had a good year or charges you a surcharge if you had a bad one. A Large-Deductible Program is another option, which hinges on your ability to absorb a heavy share of a loss in exchange for a lower premium. That can be particularly appealing to companies that experience very low losses and are confident they will continue on that track.
Loss-sensitive programs can cover multiple locations under a single account, and some insurers will help you with managing your program by providing loss analysis and other support services.
These programs can be applied under numerous insurance lines, including Property, Liability, and Workers Compensation Insurance. While some insurers restrict loss-sensitive programs to large employers, others will accommodate smaller companies that qualify. The key is to have the right balance of risk and financial strength. Your Evans, Pires & Leonard advisor will work with you to determine your eligibility.