How a Stone Installation Company saved $1,010 on Workers' Comp with Kickstand
By educating a business owner about purchasing options, Kickstand Insurance helped a stone and marble installation company in Florida save $1,010 on their workers' comp premiums.
The Challenge: Misconception about where to get Workers’ Comp
Many company owners have a misconception about where to buy insurance. This was the case for a stone and marble installation company based in Florida, paying $2,500 a year for workers' comp.
They had gone to a PEO two years prior after being declined by the standard market. They didn’t realize that after a year or two of coverage, they could likely get a better deal outside the PEO.
The Solution: Educating the Client
Our agent informed the owner that a typical insurance company would probably be willing to work with them now that they have two years of prior coverage. Kickstand Insurance found the company a new carrier that was willing to insure them now, enabling them to leave the PEO.
What is a PEO?
A PEO (Professional Employer Organization) is often the best solution for startups, high-risk businesses, and those with a poor claims history. PEOs operate a master “company” with a large pool of employees across diverse industries, diluting the risk. This larger pool makes individual risks less significant, making carriers more willing to offer coverage.
Once a company has prior coverage from a PEO for a year or two, the standard market is often more willing to offer insurance at better rates.
The Results: Substantial Savings
As a result of switching to Kickstand Insurance, the company saved $1,010 on their premium. This represented a substantial 40% reduction in their annual workers' comp costs. The transition was smooth, and the company obtained the necessary coverage without the added costs of a PEO.
Takeaway: Think of a PEO as necessary but temporary Solution
Check back on the standard market after you've been with a PEO for a year or two. Some carriers on the standard market may be willing to offer coverage now that you have prior coverage to show.
Note: If you were declined due to your business type (e.g., construction), you might still need a PEO. But if it was due to no prior coverage, revisit the standard market.
Snapshot
- Industry: Stone and Marble Installation
- State: Florida
- Payroll: $50K
- Original Premium: $2,500
- New Premium: $1,490
- Kickstand Annual Savings: $1,010
Key Takeaway: After a year or two with a PEO, check the standard market for better rates.
Is your PEO costing you too much?
If you need to stay with a PEO, check the associated fees to ensure they’re reasonable.
Watch out for these common fees:
- Admin Fee: This can be a percentage of your payroll or a flat fee, whichever is higher. Pay attention to the higher amount.
- Setup Fee: Some PEOs charge setup fees ranging from $1,000 to $2,500. These can add up quickly.
- Deductibles: Often required by PEOs, even if presented as optional. Evaluate if this is necessary for your business.
- Weekly minimum premium: A fixed amount you pay each week, regardless of your rate. This can significantly increase your premium, so ensure it aligns with your business needs.
Find YOUR Savings
Find out how Kickstand can help your business save money. Contact us today for a comprehensive policy review and see if we can help you save money. Our experts are ready to dive into your business details and ensure you’re getting the best possible rates.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
