Moving From a PEO to a Workers Comp Policy

Moving From a PEO to a Workers Comp Policy

There are many situations where having a PEO may be the best fit for your company. However, what if you want to switch from a PEO? Many business owners don’t realize how big of an obstacle a PEO can be when trying to move back to a traditional employee structure with a Workers Comp policy.

Moving From a PEO to a Workers Comp Policy- Loss Runs, Loss Runs, and Loss Runs

One of the most important aspects of shopping Workers Comp is obtaining loss runs from your prior carrier, but what happens with loss runs when you are with a PEO? Some PEO’s bundle multiple businesses together into a single Workers Comp policy, which can make it difficult obtaining Loss Runs that are accurate/valid. Alternatively, if you are with a PEO that is structured in a way that secures a separate Workers Comp filing for your company, you may be able to get the Loss Runs. This can make a huge difference in the amount of premium you have to pay on your Workers Comp.

Moving From a PEO to a Workers Comp Policy- Split Risks

Some companies try to build a Workers Comp history by having a year of coverage with just one or two of their employees, with the remainder staying on the PEO. This is called a split risk and it is frowned upon by just about every carrier. If you try to go this route, you may end up making it harder to switch because you will likely be cancelled or non-renewed by the Workers Comp carrier you are with for having a split risk. Rather than trying to split your company up in order to get a Workers Comp history started, it is usually best to just pay a bit more for one year with a carrier like State Fund, before moving to a preferred carrier.

Moving From a PEO to a Workers Comp Policy- Industry Specific PEOs

There are certain Workers Comp industries that are easier to move from PEOs than others. For example, a company that primarily has clerical employees should have a relatively easy time find a Workers Comp policy with a preferred carrier. Alternatively, a company with construction or healthcare may be a bit more difficult to make the switch. However, regardless of the industry you are in, there is almost always a Workers Comp solution for you.

Moving from a PEO is not always a difficult proposition. We can help you make the transition easier. Give us a call at 925-297-4829 to learn more.

All information is general in nature and is intended to provide guidance only. It is up to you to request specific coverage options, the agency and agent do not bear this responsibility. Always read the policy if there is a questions about coverage or a claim. If any information herein should conflict with your actual policy’s specific language, the policy language will be controlling.

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