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PEO Workers Compensation

PEOs. PEO Work Comp Models

PEOs. Master Policy vs Pay As You Go Work Comp





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Workers compensation for PEOs.

PEO Workers Compensation Insurance Models


PEOs offer work comp to their clients in several different forms including fully insured master policies, captive policies, high deductable master policies, and client owned policies.


PEO Master Policy

A fully insured master policy means the PEO writes clients' workers compensation under their own FEIN and experience rating with an insurance carrier that is fully insured at "first dollar cost" for claims made under the policy.  This means the carrier pays all expenses for all claims.


PEO Captive Policy

A captive policy is a separate insurance company set up by the PEO via another licensed carrier for the purpose of writing insurance under the captive.  The typical arrangement entails the PEO and the fronting carrier sharing expenses, profits, and losses developed within the policy.


PEO Deductable Policy

A high deductable master policy is the same as a fully insured policy written by a carrier except that the PEO is responsible for claims up to a certain limit per claim with a aggregate limit to limit their exposure.


PEO Client Owned Policy

A client owned policy is a policy written only for the client company but administered by the PEO.  Client owned policies are more portable and allow the client's NCCI experience modifier to continue to develop over time.  Employers with health modifiers may be best served by retaining their experience modifier in case the PEOs modifier increases or they exit the PEO relationship.


PEO Master Policies vs. Pay As You Go Policies


In recent years more workers compensation carriers have entered the PEO payroll arena by offering Pay As You Go programs to certain Commercial Insurance Brokers such as The Insurance Shop. 


Many carriers prefer writing polices for each client company separately because experience modifiers are a true reflection of their claims history over time.  Carriers often feel like they are more adequately able to price these policies on an individual basis as opposed to utilizing the experience of an entire PEO.


Now days many insurance companies have Pay As You Go programs in place to help reduce deposit costs, improve cash flow, and prevent large audit balances.  These programs mirror the PEO workers compensation process by collecting premium via the payroll process.  Therefore, the original value of master PEO policies has been diminished except for clients with higher experience modifiers who will still benefit from accessing PEOs with a lower experience modifier.  These PEOs will benefit as well as long as loss ratios remain low.


Pay As You Go insurance options have also expanded into the payroll only industry as more and more payroll companies continue to partner with insurance aggregators like the Insurance Shop to offer these programs.


Learn more below:


  PEOs. Pay As You Go Workers Compensation for PEOs


  PEOs. Pay As You Go Workers Compensation for Payroll Companies


  PEOs. Pay As You Go Workers Compensation for Employers





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