Free up Your Cash Flow With Pay as You Go Workers’ Comp

Nearly all states require that businesses carry workers’ compensation insurance. Some offer state-operated funds, but there are also many private policy providers. In most states, employers can choose between private and state-operated coverage. No matter which you choose, however, traditional workers comp insurance plans require an annual lump-sum premium payment based on an estimate of the yearly payroll.

What Is Wrong with Traditional Workers’ Comp Plans?

As the lump sum payment is based on a projection of the payroll, it is likely that the premium you pay will be either higher or lower than the actual amount due. This is a problem for organizations that rely on seasonal workers. If the premium paid is lower than the amount due, the insurer will request further payment and this means having a reserve of funds to hand at the end of the year. For example, small businesses may find it hard to manage their cash flow to make large lump-sum payments.

How Can Pay As You Go Workers’ Comp Help?

Pay as you go workers comp can provide a solution to these problems. These plans allow you to make premium payments every time you run your payroll. This avoids the issue of over-or under-paying. Some providers will even allow companies to set up automatic payments. Most importantly, these policies provide businesses with the opportunity to create a more accurate cash flow plan.

Pay as you go plans offer flexibility, accuracy and efficiency. An insurance expert can help you to craft a policy suited to your needs.

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