The only remaining claims are catastrophic, and have an average value significantly above the deductible. The ultimate burden of payment of the workers' compensation claim lies with the insurer. Workers' compensation was designed to ensure that all workers would be financially protected in the event they were injured on the job. In order to maintain this protection for the workers, insurers are not legally permitted to give up this obligation. The risk that an insurer will not be reimbursed increases the potential payout for the insurer, and therefore reduces the size of the premium reduction of the insurance policy.
Some costs increase with a large deductible policy.
A large deductible policy requires continuous tracking and invoicing of claims falling under the deductible. Also, due to the delayed invoicing of funds by the insurer, the insurer will not be able to earn as much investment income as it would under a standard insurance policy. These costs further reduce the size of the premium reduction of the policy. Some costs do not change with a large deductible policy. The insurer is still required to investigate, adjust, and settle all workers compensation claims.