Welcome back to the ARC PEO Underwriting 101 series where we are breaking down the what, why, and how of the PEO underwriting process and removing the doom and gloom of the daunting submission process.  

As a quick recap, when requesting PEO proposals for your company, data is required from your company in 4 categories for a complete PEO submission: Benefits, Workers Compensation, Payroll, and HR. Each category provides insight into the potential needs (as well as potential costs and savings) of your company joining the PEO. Did you miss the intro to this series? Catch it here: Underwriting 101: Understanding the Underwriting Process

Now, let’s talk about Workers Comp. 

The number one question asked about Workers’ Comp when it comes to PEOs: How does it help my company? Being that you may already have a policy with a carrier you’re happy with, it’s important to understand why you would want to shop for Workers’ Comp with a PEO. Workers’ Comp with a PEO carries many benefits for your company, including, but not limited to: 

  • Cost Savings 
  • Access to a National Master Policy and tools and services to improve Risk Management 
  • No premium deposits or audits 
  • No extra fees 
  • Access to High-Risk Coverage 

Head over to our recent article on 6 Reasons to Choose a PEO for Workers’ Comp to learn more. 

Through the underwriting process, the PEO will evaluate whether your company is a good fit to join a PEO’s Master Workers’ Comp policy.

The PEO will be reviewing:  

  1. Your company’s expected exposure
  2. Your company’s actual current exposure 
  3. Your company’s historical performance 
Here’s How They Do It 

This information is gathered primarily through the Employee Census, your company’s WC Loss Runs, Current Workers Compensation Declaration and Information pages, and the ARC Request for Proposal (RFP). 

The Employee Census is one of the most important documents in the submission process. It contains information on all of the employee-related pillars of the Workers’ Comp relationship, including Payroll, Benefits, and Workers’ Comp. This gives the PEO a clearer picture of your current Workers’ Comp exposure.  

The information that you provide on the ARC RFP about your company’s operations, and any job descriptions you provide, will also help the PEO assess the level of risk based on your industry and what your employees are exposed to on a daily basis. 

Lastly, you will submit your company’s Loss Runs and Current Workers Compensation Declaration and Information pages. Your Loss Runs from your current and past carriers will provide information on your company’s past claim history while your Current Workers Compensation Declaration and Information pages will outline your current coverage and define your projected exposure for the year.

Once the PEO has all this information in hand, they can then decide if the risk that your company poses fits into their risk appetite. This full picture of your risk exposure also informs the rates that the PEO will be able to offer should you choose to join the PEO. 

Luckily, the Workers’ Comp documentation is one of the easiest portions of the PEO Proposal Checklist. Once you’ve got Benefits and Workers Comp completed, you are two pillars down and only two to go – Payroll and HR! For any questions on how best to collect these documents or what information is required, you can always reach out to ARC PEO Consultants for clarity. 

STAY TUNED: Next week, we will cover what is needed to submit your company for Payroll. Don’t miss it! 

Hit the comments or schedule a call to learn more! 

Not sure if a PEO is right for your company? Take the “Is A PEO Right For You?” quiz to find out!

Published On: March 30th, 2022 / Categories: PEO / Tags: , , /