In a world where we have such exciting "pay as you go" options like cell phone plans and bicycle rentals, something like Pay as you Go Workers' Compensation Insurance might seem a bit less exciting to the average person.
But as a business owner or Payroll and HR leader, pay as you go Worker's Compensation should pique your interest. That's because it offers some major benefits over traditional Workers' Compensation Insurance policies.
As we all know, Workers' Compensation Insurance is mandatory for most employers (although there are slight differences in requirements by state). Generally speaking, Workers' Compensation Insurance protects the employer from lawsuits brought by injured employees. It also ensures the employee gets benefits regardless of who was at fault.
Here are 3 benefits of opting for pay as you go Workers' Compensation Insurance, rather than a traditional policy:
1. Helps with cash flow
Traditional Workers' Compensation policies require a sizeable down payment at the beginning of the policy period. With pay as you go there's no deposit required. This equates to immediate cash flow benefits for your company.
2. Gets rid of installment fees
Usually, Worker's Compensation policies charge installment fees in addition to the premium payment. Pay as you go eliminates these fees for the entire policy term.
3. Improves accuracy
With a pay-as-you-go policy, each time you pay your employees your Workers' Compensation premium is calculated and electronically transferred to the insurance carrier for payment. By using your exact payroll figures instead of advance estimates, your premium will be much more accurate. This significantly reduces the likelihood of premium adustments at the end of the policy period.
As we mentioned above, Workers' Compensation Insurance is mandatory for almost all employers.
But it's not mandatory to have a policy that requires big up-front payments, additional fees, and inaccurate estimates.
With Workers' Compensation Insurance, you have options. And the pay as you go option has its benefits.