The formation of IPEP began in 1989 as a response to the need for public employers to find affordable workers' compensation coverage. The concept of public entities joining together to solve their risk financing needs gained momentum when they found it increasingly difficult to secure needed coverage and quality services from the commercial insurance market. By the end of 1990, 33 members had joined together to form the nonprofit, self-funded workers' compensation risk sharing program known as the Indiana Public Employers' Plan (IPEP).

After 20 years of operation, IPEP has grown to approximately 700 members, distributing membership through a network of approximately 250 independent insurance agents. Today, IPEP covers as much as $1,000,000,000 in public worker wages.