A flat amount added to the premium of a risk below the experience rating size. This term is found in a workmen’s compensation Policy. The charge is supposed to equate the cost of the Insurance Company of issuing and servicing the Policy of a very small risk.
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A charge added to the premium amount. Most often, this is done to workers compensation policies, or other small policies that have low premiums. The cost of servicing these policies is too much to recoup on premiums alone.