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What is Your Real Cost of Insurance? Understanding the Concept of TCOR


From Thompson Insurance

If you’re a business owner, and you aren’t familiar with TCOR, or Total Cost of Risk, it can really be to your advantage to understand the concept. As a full-scale approach to risk management, TCOR takes an all-encompassing look at what are you’re paying for in terms of insurance premiums, self-absorbed losses, the credits or debits to your Worker’s Compensation program and many other hidden costs related to your overall risk management. And, understanding TCOR can help you bring money back to your bottom line and help create a culture of optimized safety and compliance within your organization.


Simply put, TCOR is: Total Cost of Insurance + Cost of Retained Losses + Administrative Costs of Risk Management. To break it down a little further:

  • Total Cost of Insurance is the total amount of premiums paid.
  • Cost of Retained Losses include anything you’ve “self-insured” or paid for out-of-pocket and not claimed as an insurance loss. Which would also include any deductibles paid out.
  • Administrative Costs of Risk Management would include the money that goes towards any on-staff risk management personnel, safety training programs and or software, the cost of 3rd-Party administrators involved in your insurance program.

Many companies only think about insurance and worker’s compensation premiums when they consider their ‘cost of risk’. But, when analyzing these costs together, you can use this information to really take a holistic approach to your risk management. By using your TCOR, you’ll be equipped to make more informed, data-driven decisions that will ultimately lead to effective cost savings, as well as a safer and more efficient environment for your employees.

Using Your TCOR to Save Money While Keeping Employees Safe

Everybody loves data nowadays, and you can use your TCOR to clearly see how much your risks are costing you each year. After looking at the key metrics, your insurance agent can help you identify areas where you could put some additional measures in place to save money and keep your employees safe.

This could mean revamping your safety program, improving employee training, or implementing a return to work program if that’s where you noticed significant loss.

Are workplace injuries resulting in even further financial losses? For instance, you may find that you’re losing money due to decreased productivity after an employee is injured on the job. In this case, you might save money by implementing a return to work program where you develop a light duty schedule for that employee.

Are your drivers getting in avoidable wrecks? Say you noticed that your drivers have had a lot of rear-end accidents lately. For this reason, it might be a good idea to train your drivers on ways to avoid distracted driving or teach them ways to prevent the most common auto accidents like at intersections.

Are unseasoned employees costing you money? Right now, there’s a very large labor shortage for contractors and even experienced drivers, meaning you might have had to hire someone who’s a little green simply because you needed more bodies.

In this instance, the ability to train them on certain aspects of their job can really limit claims since many claims tend to come from those with less experience under their belt.

Finding a Partner to Add Value: The Thompson Risk Management Center

At Thompson Insurance, all of our insureds have access to our Risk Management Center where we provide them with tools and information that can help them get that total cost of risk down. Our Risk Management Center incorporates a range of information from compliance to HR to safety to even environmental hazard issues, including OSHA compliance. With this tool, we’re able to say, we’ve got your TCOR, and there’s are the areas where we see the portal helping. From there, we can advise you on what to use in order to lower or eliminate those risks.

One of the great things about this portal is that employees can log in even when they’re onsite to do safety toolbox talks right on their smartphone. All of this is easily tracked and can really take the guesswork out of staying on top of safety trainings. Plus the ease in documentation can really come in handy when OSHA starts asking questions or in the event you do have a claim and the insurance carrier is adjusting that claim.

Although there are always losses and unforeseen incidents no matter how much training you do, things are going to happen:it’s why you buy insurance in the first place. But we can help limit some areas where you may have money going out the back door so that you might be able to put it back in your pocketbook at the end of the year.

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