Many things in life are necessary evils, be it taxes, the DMV or the Dentist.  For business owners and managers, Workers’ Compensation insurance falls in there, too.

Workers’ Comp is required, if you have employees and it protects you, and them, in the event of an accident. Some industries are more prone to accidents, while others rarely will see any.  But, regardless of how you feel about it, all businesses large and small must have Workers’ Compensation Insurance coverage. 

There are various options when it comes to Workers’ Compensation insurance. You can use a broker, who in turn will find a carrier that will write your policy.  You can use the State Insurance Fund in your respective State. While those are options, they come with additional headaches.

More and more SMBs are turning to PEOs to eliminate the pain points associated with Worker’s Compensation insurance – including these: 

1. Year-End Audits - A PEO eliminates year-end audits because you are on the PEO’s Master Workers’ Compensation Policy. So the PEO handles all compliance and reporting issues, including audits. 

2. Pay-As-You-Go - Most Workers’ Comp policies are based on the exact number of employees you have when the policy is issued. This results in you owing money at year-end if you have additional employees. In a PEO, your Workers’ Comp cost is based on the exact number of employees for that payroll period. 

3. Modification Rate and Class Code Cost - Outside of a PEO, your Modification Rate is based on your claims experience and your Class Code Cost. A PEO gives can lower your Modification Rate to theirs, because your State and your Class Code Cost is based on the PEOs Master Policy, which has hundreds and thousands of other small businesses included. 

4. Workers’ Comp Claims - Handling and processing Workers’ Comp claims is a chore and a drain on your productivity resources. In a PEO relationship, the Workers’ Comp claims are handled by the PEO, freeing you up to focus on your business.

A PEO assigns a team of professionals to your company.  One of these team members will be a specialist in Worker’s Compensation and they will also typically work with you to install systems and programs to further reduce Worker’s Compensation claims.  It’s in your, and the PEO’s, best interest to keep people working, not sitting home healing.

A Professional Employer Organization can significantly help you with Workers’ Compensation. From lowering your overall cost, handling reporting, and handling your claims from start to finish, PEOs bring expertise that makes your life simpler.

At Dinsmore/Steele, we help small businesses evaluate and choose the right PEO partner for your company.  If you have a few minutes, we’d love to explain how our no-cost-to-you service works.