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Why it May be a Bad Idea to Get Insurance via the Payroll Company

Payroll can be a real hassle for any business. Using a company that focuses on providing payroll not only saves time, it also helps maintain and record precise calculations and allocation of wages and associated taxes.

RELATED: Various workers comp options for various businesses

As for getting workers comp insurance through a payroll provider – while this may seem like an enticingly convenient option, you actually may be better off going straight to an experienced  insurance agency.

This is because the payroll provider cannot offer the same accuracy, options, discounts and advice that those immersed in the industry - and workers compensation -  can.

Further, think about the following issues when contemplating the use of a payroll provider for workers compensation:

  • Is the yearly workers compensation premium at a competitive rate?

  • Will you be presented with a dividend payment?

  • Is there risk control support?

  • What kind of employer’s liability limits are there?

  • What is the payroll company’s EMR (experience modification rate used to evaluate previous injury costs and future likelihood of injury)?

  • What is your business’s EMR if evaluated separately?

Every business has its own considerations. The best way of assessing whether or not a payroll company can offer an optimum workers comp option is to address how your company  may or may not benefit from it. For further assistance in understanding your individual workers compensation needs and the best method of acquiring protective coverage, speak to an experienced insurance professional.

PRIME Insurance is a three-generation family-run independent agency. We’re proud to partner with many of the leading underwriters – recognized companies like ACE, AmTRUST, ASI, ASSURANT, CHUBB, CNA, Employers, FOREMOST, Liberty Mutual, MetLife, PROGRESSIVE, Safeco, StillWater, Travelers, USLI, ZURICH and more. This gives us the ability to provide all forms of nationwide coverage and bonds at competitively lowest quotes. Visit us on our online insurance website or email us at PRIME [at] primeins [dot] com or call us at 732-886-5751 and HAVE A PRIME DAY™!


Summary: Though using a payroll providing service for workers compensation may be enticing, every business should examine if this manner of acquiring the coverage is in its best interest.


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