A PEO (Professional Employer Organization) policy is where a business partners with a PEO to handle not only workers' compensation insurance but also payroll, HR, and benefits. The PEO essentially co-employs the workers, which means they take on some of the responsibilities for employee management, including securing work comp coverage.
Why the wholesaler is pushing for a PEO policy:
Risk Pooling: PEOs combine multiple small or mid-sized businesses under one workers' comp policy, spreading the risk. This makes it more attractive for insurers.
Better Risk Management: PEOs often have safety programs in place, reducing work comp claims, which lowers the risk for insurers.
Administrative Benefits: PEOs manage payroll and claims processing, which simplifies things for insurers and ensures more accurate premium calculations.
Harder-to-Place Policies: For industries or businesses that are high-risk, standalone workers' comp policies might be tough to place. A PEO package offers a solution by bundling work comp with other HR services, making it more appealing to insurers.
In short, offering the workers' comp policy through a PEO could help you get better rates and coverage, especially if the business is in a tough-to-place market.