Tag business insurance

Wouldn’t it be great if employers could make all their employee problems go away? Make them “Somebody Else’s Problem”?

We believe that when the Employee Leasing industry chose “PEO” as their new, politically correct moniker, they chose the wrong letters. We think they should call them Employer SEP’s – where the Employee Problems become Somebody Else’s Problems. When an employer and a PEO form a business partnership, defined by the Client Service Agreement (CSA), many of the risks and responsibilities are transferred (in whole or in part) to the PEO and are no longer the employer’s headache.

Will Tenney talks about the choice of the letters “PEO”

Some of the headaches that can be shifted or at least alleviated include:

Payroll Tax Liabilities

Since the employees are now employees of the PEO for tax purposes, and registered on the PEO’s FEIN, IRS payroll tax audits are not as much of a threat anymore. In most cases the client isn’t even involved. The PEO is audited, shows their records and it’s all over. In rare cases, a PEO might have to produce information supplied by the client, but this happens so seldom you might call it a Payroll Unicorn.

Workers’ Comp Claims

The PEO will be the employer of record, so they will be responsible for paying all workers’ comp premiums, and involved in negotiating the claims. In most states, the experience modifier will stay with the PEO, and the client will not be adversely affected in the future by past claims. In addition, the PEO has safety expertise, training and written programs to put in place to reduce the frequency and severity of claims.

Unemployment Claims

Similar to workers’ comp, this becomes the responsibility (and liability) of the PEO, who is the employer of record. The State Unemployment Tax Act rate (SUTA rate) of the PEO is the SUTA rate that gets affected (in most states. There are some exceptions) and the client can maintain a clean record. In addition, the PEOs are much more experienced at handling and negotiating claims and experience has shown they are much more effective at removing false claims.

Employee Lawsuits for Employment Practices

Again, since the PEO is the employer of record, some or all of the liability shifts to the PEO in these cases. This could include:

• Sexual Harassment
• Wrongful Termination
• Discrimination
• Unfair Hiring Practices

… to name but a few.

If you would like to make some of your employer problems become Somebody Else’s Problem, please feel free to use the contact form below, or call us at 407-490-2468

One of the unforeseen negatives of the Affordable Care Act was increased costs for workers’ compensation insurance, coming both from higher taxes assessed to insurance companies and higher costs of claims. The claims costs are on the rise due to more dependance on workers’ comp vs. traditional health insurance, increased medical costs and the big one, increased legal fees.

As the costs rise, the profit margins diminish. Naturally, the carriers are seeking to reduce their risks to maintain acceptable profit margins. This has led to a “hard market” where risks that were previously accepted are now being cancelled or non-renewed.

Staying “Off the Radar”

It is important to any employer who depends on having reliable workers’ comp insurance to remain off the radar of the carriers and their underwriters. The squeaky wheel get’s the grease, or on this case, the cancellation.

Here are some tips to stay off the radar:

1: Do not shop your workers’ comp policy right now. This will only draw attention to you or your company. Many lesser experienced agents use software that “shotguns” your application to several carriers, and several intermediaries who may duplicate your submission. Nothing sends a red flag to an underwriter more than seeing a submission come in from multiple sources at the same time.

2: Don’t do anything to jeopardize your policy. Don’t hide information, improperly describe working conditions or in any other way try to deceive your agent or your carrier. This is not the time to try to get them to change you to a lower priced code.

3: Do everything you can to minimize claims. Institute a safety program, and if you already have one, make sure everyone is following it.

4: Make sure your website does not advertise you doing “high risk” activities. We’ve seen landscaping company websites showing workers on the roofs of houses, cleaning out gutters. That is NOT in the landscaping comp code description.

5: Pay your premium on time and in full. Slow pay and low pay are great ways to get “on the radar.”

Below is a video of our lead agent John Will Tenney with further discussion:

If you would like more information please use the contact form below.

As part of our strategic and contractual alliance with Stonehenge Insurance Solutions, we are happy to work with a growing Property and Casualty insurance agency, Hourglass PC.

Based in Tequesta, FL, Hourglass is expanding throughout the state, and eventually hopes to have offices nationwide.

Senior Agent Greg Siebern tells us, “We are focusing on the personal lines of home and auto, as well as the small business products such as general liability, workers’ compensation and business owner packages.”

As part of the marketing plan, Hourglass is sponsoring the Orlando Runners and Riders cycling team, Hourglass Cycling. On the belief that more and more business owners and C level executives are engaging in amateur sports such as cycling and running, Hourglass wants to take a leadership position in the Health and Wellness industry.

“Cycling is the new golf.” Will Tenney of PEO Pros tells us, “When you are riding in a group of 50 to 100 cyclists for several hours every weekend, there is conversation going on at all times. Where there is conversation there can be networking. Where there is networking, there is opportunity to help.”

Jason Irving returns to us as a client with his new company, Engenium Staffing, a technical, engineering and professional recruiting and staffing firm.

“PEO Pros was and still is our best option for securing workers’ compensation and other insurance products.” Jason tells us, “We come here first and never need to go anywhere else. Now that they are partnered with Stonehenge Insurance and Hourglass Property and Casualty, they can take care of our other needs as well.”

We are happy to provide Jason and his company with workers’ comp, general liability, umbrella liability and even have one of our partner agencies working on his homeowner’s policy.

Here is a short interview with Jason where he tells us of some exciting positions available in his industry:

Our property and casualty agency has been creating strategic alliances with other large agencies to supply even more markets for business insurance, both to the traditional business owner and PEOs.

Agencies we work with include:
Stonehenge Insurance Services – PEO workers’ comp
Hourglass PC – PEO workers’ comp
Cypress Risk Management – large workers’ comp policies
Pontell Insurance – Business and personal lines
Petrucci Insurance – Business and personal lines
Corsair Insurance Agency – Doctor and Lawyer Professional Liability
Elite Insurance – Business and personal lines
I-surance, LLC – health insurance professionals

We are a provider of master policies to PEOs, Payroll and Staffing Companies for Workers’ Compensation Insurance.

Convenient Links for PEO Owners:

• Our Agency Alliances
• Latest PEO Insurance updates (master policies)

There are several viable options for PEO owners in today’s comp market, including:

• Guaranteed Cost programs
• High deductible programs
• Captive Loss Funds
• Offshore Loss Funds
• “Rent-a-captive” Segregated Portfolios

If you would like to hear more about our PEO master policy options for workers’ comp please contact us using the form below:

Has your workers’ comp coverage been denied or canceled? Not yet? Maybe it isn’t your turn just yet? If renewal time is coming up and you are worried, there are some steps you can take to make it easier.

What is involved in getting workers’ comp coverage? Understand that the insurance company is in the business of managing risks and they are taking a risk every time they add or renew a client. Your goal as a business owner then, along with your agent, is to convince the insurance company, or more specifically the underwriter, that you are a risk worth taking.

Here are the top 10 reasons why company owners either can’t get workers’ comp coverage or have it canceled or denied.

#10: Failure to be specific about what you do.
The ACORD form isn’t always enough. A detailed description of operations goes a long way in to convincing an underwriter that you are worth underwriting. It’s important to use percentages as well. For example, a lawn service company may want to say “80% residential and 20% commercial.” Make sure to list known excessive risk exposures too, such as how often you trim trees, or clean out gutters (involves getting on a roof.) Underwriters do not like surprises!

#9: Failure to maintain a safety program.
This is going to show up in your claims report sooner or later. A safety program not only has to be written, but enforced. Some roofers were seen working on a county school roof recently. They all had harnesses on but they were hooked to nothing. Doesn’t help much. Make sure your employees know the safety program and follow the rules.

#8: Spreading your company too thin.
So many companies try to do more than one thing. A famous person once said “If you try to be everything to everyone, you are going to end up being nothing to nobody.” Find your niche, stick to it, and don’t branch out in to other, riskier areas.

#7: “Shopping” your insurance around on a regular basis.
Sounds like a good business move doesn’t it? It’s not. Underwriters do not want to see your application year after year. Your company will get a reputation as a “policy jumper” and it will become more and more difficult to get a single company to take a chance on you.

#6: Underestimating your payroll to reduce premium.
Admittedly, a lot of times this is the fault of the agent. He or she underestimates your payroll to get you a lower quote. It has a downside, in that it makes you that much less attractive to the carrier. Report your payroll figures as accurately as possible. You plan on growing your company don’t you? It is OK to put that growth in your estimated payroll.

#5: Using too many subcontractors.
Lawyers have learned to “pierce the veil” and “climb the ladder” in subcontractor claims. If more than 20% of your business is handled by subs you are going to have a difficult time getting a traditional workers’ comp policy. Some companies have gone to strategic partner – referral arrangements, rather than subcontracting, because it separates the liability. Granted, you lose control of the cash flow but it is a lot easier to insure.

#4: Using “1099 employees”.
Let’s be clear, there is no such thing as a “1099 employee”. 1099s are reserved for independent contractors. Employees get W-2s. There is no middle ground. If you are paying employees as contractors, and therefore avoiding taxes and premium, sooner or later it will be revealed. The longer it takes to get caught, the more expensive it will be. Be very careful with this. Many states (and the IRS) are cracking down on this.

#3: Owning too many corporations or LLCs.
Workers’ compensation rules are different in different states, but all of them realize the potential cross-company liability of shared ownership companies. So much in fact, that there is a special form (ERM-14) that has a section dedicated to insuring companies with common ownership. While it may seem like a good idea to have multiple companies, most CPAs will tell you that the advantage is minimal compared with the extra paperwork and insurance difficulties. Check with your CPA of course, but it may be to your advantage to have different divisions within one company as opposed to having separate entities.

#2: Putting too much on your website.
Underwriters have the internet on their computers. They know how to use Google. Be assured they will comb every inch of your website to make sure you aren’t doing some high risk activity that you aren’t reporting. This has been the killing blow for several companies trying to get comp coverage. Which leads to the last, and most grievous error companies can commit:

#1: Lying to the insurance company (or agent).
Once you are caught lying on a form, or in an underwriting survey you are pretty much done for. We don’t know exactly how but we know that underwriters communicate with each other. We suspect they have a private Facebook group they tell stories in, and have good laughs about their latest “applicant.”

Never, ever, ever put false information on an insurance form. It’s in writing then and goes on your record. Don’t do it.

Why would anyone expect to find all their payroll, workers’ comp insurance and HR answers from one PEO?

Would you buy a suit that didn’t fit? So why expect one PEO to do it all?

Many business owners are frustrated that they can’t find the right payroll, workers’ comp or PEO solution that matches their business. Some small businesses feel “swallowed up” in the machine of a large, national payroll company. Larger businesses find that a local PEO or payroll provider just doesn’t have the experience, service or access to products that they need. There is no “One Size Fits All” in business.

Do any of these comments sound familiar?

• “My PEO doesn’t offer the services I need”
• “Nice fancy PEO website, but I know I am paying for it”
• “All we need is workers’ comp and payroll, why are we paying for all this other stuff?
• “We keep getting denied for workers’ comp coverage”
• “We’re tired of calling a machine. We want to talk to a person!”
• “Our rep? You mean this month’s rep? We’ve had 6 different reps in 6 months”
• “I wish my insurance agent could help us with more than just insurance”

Perhaps you might need a Custom PEO Solution. We may be able to help. Tell us what is missing. Please feel free to contact us using the form below.

While there are many advantages to having a PEO manage your workforce, many times it is troubles with Workers’ Compensation Insurance that brings the client to a PEO.

Is it better to be with a PEO? To have a professional partner to assist you with risk management? We of course, have a bias, but here is another point of view. This is an excellent article written by Antony Kelly
Antony Kelly’s Article

Here are some excerpts we particularly liked:
“Simply put, traditional workers comp coverage will require a small business owner to make an upfront deposit, based on an estimate of their gross annual wages. The company will send quarterly information to the insurer, who then calculates the bill and requests payments. Since these are all estimates, however, an audit is required, including a reconciliation process that will help bring the numbers together. Unfortunately, if the deposits and quarterly estimates do not cover the total amount due, the company is mandated to reimburse the carrier at the end of the year. This could potentially be a substantial cut to the small business person’s cash flow. Interestingly enough, payments that extend beyond the balance may roll over into next years beginning balance; nice for the carrier, bad for the business owner. ”

“PEO companies not only provide you with pay as you go workers compensation but also outsourced benefits and a variety of resources that help you comply with employment related issues and administrative paperwork. In fact, many businesses under 100 employees should be able to significanly reduce their in-house administrative burden through the use of a PEO, which provides additional value over traditional and pay as you go workers comp plans. ”

Thank you to Antony Kelly for writing this article, and to Shane Underwood for finding it.

People ask us when they need a PEO, or even why?

Hard question to answer with anything other than “Maybe you don’t!”

Our staff can spend a lot of time telling you why you should have a PEO, and you can probably find some of that on other parts of this site. For fun though, and maybe for educational purposes, we asked them, “When DON’T you need a PEO?” Well they tossed it around the bullpen and surprise surprise, they came up with at least 7 scenarios when a PEO is not called for.

Here’s some situations they gave us when you DON’T need a PEO:

1: You don’t have any employees
2: You have employees but they cause no problems and create no risks
3: You are a government entity who cannot be sued
4: You are a very large company with an internal legal and HR department
5: You are a very large company with annual workers’ comp premiums in excess of $250,000. (In this case you should have your own, custom comp solution, such as a captive or a self funded plan. Ask us about that)
6: You are a short term company, not likely to be around for a while
7: You will never want to sell your company, or facilitate an easy ownership transfer

Can you think of some others? Please let us know!