Pay As You Go Insurance
What is Pay As You Go Insurance?
Pay
As You Go Insurance is a relatively new way to sell business
insurance. With traditional work comp and general
liability, most insurance companies typically require up to a
25% premium deposit and then additional installments during the
next six to nine months.
There are several inherent inefficiencies with this model.
Number one, it can require a fair amount of money down to start
the policy. Number two, the business owner has to fully
pay for the policy during the first 6 - 9 months, even though
they are buying coverage for the year. These two factors
can adversely effect business cash flow.
Finally, since the traditional insurance model is based solely
on the estimated premium and not actual premium, employers may
have a significant balance due or refund credit after the policy
has been audited. Either way, the business does not
benefit because it pays too much or too little during the policy
period.
How is Pay As You Go
Insurance is Different
Pay As You Go insurance eliminates many of the inadequacies of
traditional insurance programs. With Pay As You Go Work
Comp or GL, the start-up premium deposit requirements are
typically eliminated because your premium is based on actual
payroll per class code and not the original estimated quote.
In other words, the premium due changes in real time from pay
period to pay period and allows you to maximize cash flow during
the year. When
business is up, so is premium. When its down, so is
premium. Since the insurance premium is
based on actual reported payroll, your risk of a big audit bill
at the end of the policy is also reduced.
Ask one of our Payroll Specialists about our Pay As You Go
Solutions today.
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