As a business owner—whether you have one employee or one hundred—having workers’ compensation insurance is essential. While it isn’t legally required in every state, depending on the size of your company, it’s still a necessity for protecting your employees and your business.
If one of your employees gets injured at work, workers’ compensation can cover their medical expenses, rehabilitation costs, and any lost wages they might be owed while they aren’t able to work. Without workers’ comp, you could be responsible for paying their medical bills and any other expenses related to their injury. Not only can workers’ comp help ensure your employee receives the care they deserve, but you’ll be financially protected as well.
Traditional policies have their pros, but if you own a small or mid-sized business, it’s important to weigh all of your options. Let’s take a look at how PEO worker’s compensation might differ from a traditional policy and which one could work best for your company.
What is a PEO and How Can They Help?
Professional employer organizations (PEOs) are typically full-service providers that handle administrative tasks for other businesses. This type of partnership is known as co-employment. PEOs often manage payroll, employee benefits, workers’ compensation, and human resources.
Small businesses usually don’t have a ton of extra manpower for administrative tasks. Oftentimes these tasks are piled onto the to-do lists of employees who already have a lot on their plate. This can leave more room for error and less time to focus on their own work within the organization. PEOs step in to help streamline the process and ensure everything is done correctly.
PEO Workers’ Compensation
PEO workers’ compensation tends to be incredibly flexible in terms of coverage, cost, and duration of coverage. Small businesses that primarily hire independent contractors may need short-term coverage for certain projects. Pay-as-you-go programs are a great way to make workers’ compensation more affordable and accessible. This approach can help ensure that business owners will only need to pay for what they use.
How does it Differ From a Traditional Policy?
First and foremost, traditional workers’ compensation policies tend to be more costly—particularly for small businesses that may not have a ton of extra cash allotted for workers’ comp. When you partner with a PEO, part of their role is risk management. PEOs can implement safety training programs to help reduce the likelihood of workplace accidents. By creating a safer work environment, you boost employee morale as well as save on the cost of workers’ compensation.
Choosing What’s Right for Your Business
There isn’t one-size-fits-all when it comes to workers’ compensation insurance. It’s crucial to consider exactly what it is that your company needs before making a decision on what type of policy is right for your business. What type of covereage is required for your industry? How many employees does your company have?
It’s always a good idea to get quotes from multiple providers. Compare and contrast cost as well as what you’ll actually be paying for. Are the policies customizeable or is there no flexibility in tailoring the policy to your specific needs?
Consider the level of customer support you’ll be getting with your policy. How responsive is the insurance provider? Do they have open lines of communication and are readily available to help with any questions you might have?
A final note
For small or mid-sized business owners, it’s important to weigh all of your options. When choosing between PEO workers’ compensation or a traditional policy, keep these things in mind to help you make the best decision for your company.