Replacing Your PEO-Provided Workers Comp Coverage

A Professional Employer Organization (PEO) typically provides Workers Compensation insurance and Employment Practices Liability insurance as part of its employee-leasing contract. When exiting a PEO, you’ll need to replace these crucial coverages.

Securing replacement Employment Practices Liability insurance is a simple matter. Successfully replacing workers comp insurance requires advanced planning. The work comp marketplace typically requests a variety of historical data as part of the underwriting inquiry. This information must be retrieved from your PEO or prior insurance carriers. Underwriters need time to review the documentation and perform their due diligence. An on-site inspection may be necessary. Please allow a minimum of 45 days to work through this process.

Here’s a checklist of items needed to secure your replacement workers compensation coverage, along with a brief explanation of why each is required.

1. Details of the work comp employee classification codes, payroll, and experience rating assigned to your PEO account. This information is carried forward to create your replacement workers comp policy. If not provided, it will need to be researched and reconstructed.

2. Five years of WC claims history. Underwriters require this information to determine their interest in providing coverage and the premium they’ll charge if they do.

3. Copies of your current property, liability,and umbrella policies:

Property Policy: This policy is needed to confirm that your physical locations are accurately matched to your new workers compensation insurance policy as required by state regulation.

General Liability Policy: This policy is needed to verify employee classifications and payroll to avoid coverage gaps and audit shortfalls. Also, any employment practices coverage built into your general liability policy will need to be coordinated with your separate Employment Practices Liability policy.

Umbrella Policy: This policy is needed to confirm that your new workers comp policy meets the underlying requirements of your umbrella policy for continuity of coverage.

Our agency has a fiduciary duty to replace your work comp and Employment Practices Liability coverages accurately and coordinate them correctly with your other lines of insurance. Our goal is to ensure a successful placement for you. We appreciate your cooperation through this process.

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