New BusinessBENEFITS

Advantages of ‘Pay-as-You-Go’ Workers’ Comp


Pay-as-you-go workers’ compensation is increasing in popularity in the business world. Eliminating up-front costs and outdated payment methods, are two of the biggest reasons businesses are turning to pay-as-you-go workers’ comp insurance. Another large benefit is not having to deal with audits. The cost and time typically spent on audits is no longer a factor. Find out more about workers’ compensation insurance quotes:

With just a little digging online, you’ll likely find dozens of providers offering pay-as-you-go workers comp insurance. In doing your homework, be sure to keep this in mind:

Pay-as-you-go workers comp is simply an alternative way of making your premium payments. It’s not different insurance, and it doesn’t replace your workers' comp insurance or your responsibility to pay premiums, collect/issue certificates of insurance from subcontractors, etc. Your coverage must still be provided through a state-approved workers comp insurance carrier or approved self-insured source.

That said, there are compelling reasons for small businesses to consider the pay-as-you-go method of paying workers comp insurance costs. You can learn about a few of the major ones below.

Lower Upfront Cost and Competitive Workers' Comp Insurance Costs

With pay-as-you-go workers’ comp, you don’t have to make a large, cash-flow-killing down payment up front. You can buy workmans comp insurance with little money down, and then pay your premium in smaller amounts spread over the course of the year. This makes it easier to manage workers’ comp insurance costs by avoiding a large down payment and allowing you to spread the cost out over the course of the year. Pay-as-you-go workers’ comp is not a no-money-down proposition. You will still need to pay some cash up front—just not as much.

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How to Get Workers Comp Insurance – Pay as You Go

With pay-as-you-go workers’ comp, working with your payroll service provider, you can bundle your workers comp premium with your payroll and pay a single bill—with payroll, taxes and workers comp included —each pay period.

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Pay Your Workers’ Comp Premiums Based on Your Schedule

With pay-as-you-go workers comp, your premium payments are based on your actual payroll, not projected annual payroll. That can help protect you from audit exposure, because your premium is based on real-time payroll wages, not an estimate. Plus, spreading these costs out over the year, versus an up-front payment, helps your business manage workers’ comp insurance costs. Pay-as-you-go workers comp does not free you from a workers’ comp audit by an insurance company auditor, at the discretion of your insurer. It is not a different type of policy; it’s merely a different payment option.

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