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Pick a workers comp plan that works for your business
Workers Compensation Shop.com writes direct bill workmans compensation insurance for all types of employers. Our direct bill
payment plans are the standard billing option for
retail workers compensation. Most employers are used to purchasing this type of policy
because it is the industry norm.
Direct Bill insurance refers to the way a policy is billed. It indicates that the policy holder will be billed directly by
the insurance company once a workers comp policy is bound (sold) and the deposit premium
is collected by the agent or billed by the insurance company. Direct bill workers' comp
is the most traditional way in which most business owners purchase work comp policies.
Traditionally, insurance companies have required a deposit of 15% to 25% down in order to start, or bind, a policy. Carriers
will then bill the remaining premium balance over 3 to 9 installments. While this is
a good billing option for many small businesses with consistent payroll, it can create
the following issues for some employers:
Keep in mind that traditional Direct Bill work comp is based on estimated payroll and subject to an annual year-end audit.
If your actual payroll ends up higher than your estimated payroll, you will more than
likely owe additional premium as a result of the audit.
Typical Payment and Billing Options:
Direct Bill workers compensation billing is a perfect solution for small businesses
who have a low premium (typically under $5,000), predictable payroll, and extra operating
capital. Employers who have payroll that tend to fluctuate or larger premiums may be
better served by getting quotes for
self monthly reporting work comp plans or
Pay As You Go workers comp programs.
An Expense constant is a flat dollar amount added to the Pure Premium on every workers comp
quote or policy. The expense constant represents a flat administrative charge kept by
the insurance companies for overhead costs. It serves the purpose of covering the cost
of issuing and servicing an insurance policy regardless of any claims or losses.
State fund surcharges are designed to protect employers from the higher cost of insurance
that can occur when an injury combines with a prior disability to result in substantially
increased medical or disability costs than the accident alone would have produced. These
funds are designed to ensure that an employer is not made to suffer a greater monetary
loss or increased insurance costs because they hire or retain an employee who has a disability.
2nd Injury Funds also help ensure the payment of workers' compensation benefits to injured
employees who worked for employers who failed to obtain coverage for employees.
For some industries such as business offices and small retail stores, workers compensation is typically not a tremendous
expense compared to other lines of coverage. Additionally, similar types of businesses
have predictable labor cost which makes it easy to accurately guess the overall annual
premium for workers' compensation coverage.
There are other industries, such as contractors and restaurants, where workers' comp is the single largest insurance expense
for the business. Many of these same businesses struggle with fluctuating payrolls which
leads to potential audit issues at the end of the policy period.
It might make sense for some employers to pay their premium in full or make payments over a few installments for part of
the year. However, employers with significant payroll, higher workers' comp rates per
class code, or unpredictable payroll, other billing plans might prove to be more beneficial
to improve cash flow or reduce audit exposures.
We work with over 35 workers comp insurance companies across the U.S to shop your
insurance coverage for the best price.
With dozens of Pay As You Go and easy installment plans to choose from, you get more
flexible options for your business.
We've developed Target Programs with our insurance companies to help find you the
right insurance product with lower rates.