Private Carrier:
This workers compensation option is usually only for staffing companies with good workers’ comp loss history, have been in business for at least 3 years, and generate premiums of at least $25,000 a year. Some leading insurance companies and markets that offer direct policies to companies include AIG, ULLICO, Gauranty, Travelers, Liberty Mutual, Bershire Hathaway and Pinnacol. As a result of a more selective underwriting process, their rates are usually lower than a PEO or EOR, and much less expensive than the state funds.
Direct carriers will usually require:
30% down payment on the annual premium and may finance the remaining 70% over 6- 9 months.
An annual on-site or remote audit that will review class codes for accuracy—rate discrepancies and payroll levels. An audit can be intrusive to your operations, and audit premiums can be unexpectedly substantial.
At least 3 years of good loss history.
If you select a direct policy as your work comp solution, Nationwide Workers Comp Solutions can refer you to a payroll service that specializes in processing staffing clients payrolls and administrating staffing health benefits.
Loss history matters. Employee size matters.
While private placement is often the preferred method of coverage, minimum premium requirements and/or loss experience and years in business will often disqualify a company from being able to utilize this option.
Employee class code matters.
Just as company size and loss history is important, so to are the workers comp class codes that encompass your entire staff roster. If part of your staff is clerical but the other cohort of employees are field technicians doing dangerous work you may be ineligible for placement with a direct insurer and then PEOs or EORs could be a better fit.