Why do Construction Companies Rely on PEOs for Easy Workers’ Compensation Insurance Enrollment?
There is one certainty in the construction business: someone will eventually get injured. Between the physical labor, working at heights, and the heavy machinery, it is only a matter of time. 20% of worker fatalities recorded each year happen in the construction industry. This can make running a construction company difficult because finding and keeping affordable workers’ compensation insurance is no easy feat. Add to that trying to keep employees, adapt to trends, and take advantage of business opportunities, you may find that your time, finances, and resources are stretched thin. But what’s the solution? Working with a PEO for workers’ comp insurance.
What is a PEO?
A PEO (Professional Employer Organization) takes on key administrative tasks of a business to reduce an employer’s workload and help to stay in compliance. A PEO enters into a co-employment relationship with the client company and becomes responsible for taxes, wages, HR administration, compliance, employee benefits, and workers’ compensation insurance, just to name a few.
PEO workers’ comp insurance programs increase compliance with state and federal laws and provide the peace of mind needed to allow construction owners and managers to focus on managing the business.
PEOs Helping With Workers’ Compensation
Here are a few ways that PEOs can help businesses in the construction industry with workers’ compensation insurance.
PEOs Help Improve Employee Safety Through Training
As a co-employer, a PEO creates a safer work environment. Partnering with a PEO gives you access to risk management experts who can develop and implement a personalized workplace safety program or ensure the improvement of an existing program. A workplace safety program can enhance employee safety and reduce workplace injuries. Some of the safety practices in a safety program include:
- Managing Certificates of Insurance
- Workplace Safety Audits
- Pre-employment drug tests
- Claims Administration
- Claims management
- OSHA Compliance Reporting
Working with a PEO allows construction companies to identify areas of concern, address the issues, and create a safer work environment. This will help lower the number of claims and reduce the cost of risk.
Reduced Workers’ Compensation Costs
Individual workers’ comp insurance policies have drawbacks, like annual audits and high upfront premiums. With PEO workers’ comp insurance, however, you can join a large group policy. PEOs use economies of scale to get workers’ comp insurance. They do so by leveraging the number of employees they work with across different companies.
With many employees, a PEO can secure worker’s comp insurance from leading insurance carriers, giving construction companies access to better rates and a flexible payment schedule. In fact, most PEOs provide pay-as-you-go workers’ comp, which allows you to pay your premiums each time you do payroll. Also, partnering with a PEO is a great way to avoid the dreaded annual audit and lower their experience modification factor (E-mod), potentially saving your construction business a substantial sum of money.
PEOs Effectively Manage Worker Claims
No construction site is completely free of accidents, even with a comprehensive, personalized safety program. However, handling and resolving injured workers’ claims can be complex and time-consuming. Failure to handle this process properly could cause serious penalties and fines.
Construction managers who work with a PEO gain access to an experienced claims management team that handles all claims quickly and thoroughly, while ensuring compliance with workers’ comp laws. After reporting a claim to your PEO, they will help determine the eligibility of the claim and provide comprehensive claims management from monitoring treatment to ensuring injured workers receive proper care. Having a trusted expert you can rely on to manage your company’s workers’ compensation claims is invaluable.
PEOs Help with Workers’ Compensation Cost Containment
The cost of workers’ compensation insurance affects a PEO’s relationship with all its clients. PEOs usually help clients create and implement a return-to-work program that helps employees get back to work on modified duty as soon as a medical provider gives the green light. These programs help employers minimize costs while helping injured workers stay involved with their company. They also make it easier for workers to transition back into their roles as they recover fully.
A PEO can also help lower the cost of workers’ comp insurance by reducing your construction company’s experience modifier rate (E-mod). Higher E-mod means higher premiums. When you join a PEO, you take on their E-mod, which is usually low. The PEO is going to require safety improvements and will provide risk management to keep your E-mod low. By reducing the total dollar amount of benefits paid through workers’ comp, you’ll significantly reduce your company’s premiums.
Worry Less About Workers’ Comp Insurance with Vested HR
Vested HR values the employer-employee relationship and provides market-leading workers’ compensation solutions. We’ll work with you to understand your business, guide you on compliance, and give you access to quality coverage. We will help you select and manage your workers’ comp insurance to protect your workers and business. Contact us today to request a consultation.