3 Times Insurance Agents Should Partner with a PEO Broker

3 Times Insurance Agents Should Partner with a PEO Broker

August 17, 2018 | By Tailored Solutions

Many insurance agents are wary of referring a client to a PEO. PEO companies offer HR services to their small-business clients, but they also offer benefits such as workers’ comp, 401k, and health insurance, too. And, to some agents, that feels a little too much like handing off a valuable client to the competition.

But sometimes a PEO can be the perfect match for your commercial clients, and the result doesn’t have to be a loss for your own business. It can actually mean the opposite.

Here are 3 times it makes sense to bring in a PEO:

Your Client is a Startup

Your client is excited about starting their own business, but they don’t have the 3-years experience requirement needed to get workers’ compensation coverage in the voluntary market.

Your client is anticipating hiring a staff of five, full-time employees, so workers’ comp is a necessity. He doesn’t plan on offering health insurance, though, or any type of benefits package… not at the beginning, anyway.

You’ve provided him with personal insurance lines for years: home and auto, even RV and umbrella coverage. And now you’re ready to get him set up with general liability, commercial auto, and a commercial property policy. Plus the workers’ comp he’ll need.

He’s a great client. You definitely don’t want to lose his business. But you’re not excited about his workers’ comp going to the assigned risk/ state fund, either. That means higher rates for him and no commission for you.

PEOs provide an alternative to the state fund that can be beneficial to you and your client.

You can present your client with the state fund option - and rates - and present them with a second option: a PEO.

Many PEO companies have an appetite for your client’s “new in business” status.

Not only can they typically get your client workers’ comp coverage at a competitive rate, but they’re able to provide a pay-as-you-go model that’s attached to payroll so your client can avoid workers’ comp down payments and end-of-year-audits.

Your client can also get comprehensive HR and payroll services, generally for the same price as a stand-alone workers’ comp policy.

Now your client has the workers’ comp coverage he needs, at a premium rate that is significantly lower than the state fund. He won't have to pay a steep deposit, either.

In addition, he has a professional service to handle HR responsibilities while he focuses his time on growing his new business. Data suggests that PEOs can save their small-business partners up to 21% on HR administration, so you're helping this budding entrepreneur cut startup costs at every corner.

As the independent agent who referred him, you get a competitive commission, a grateful client, and all of his other lines of business to add to your book.

PEO Ready

Your Client Works in a Hazardous Industry

Some commercial clients are more challenging than others, like your clients who work in hazardous industries. Roofing contractors, window cleaners, and towing companies that perform “highway pickups” - to name a few - often won’t meet the underwriting guidelines for the voluntary market.

These business professionals are used to the workers’ comp challenges that come along with their risky businesses. Risky business typically means assigned risk funds, big deposits, and much higher workers’ comp premiums.

But what if you could provide another solution?

What if you presented your client with a PEO as a possible solution to reduce their workers’ comp premiums and get rid of deposits? At Tailored Solutions, we’ve been able to help clients save up to 40% on their workers’ comp premiums when we partner them with the right PEO for their industry.

That sort of savings doesn’t go unnoticed by a grateful client.

Pitch it the right way, and you may even have freed up some cash flow for the cyber liability insurance policy you’ve been suggesting to your client. They could increase their business protection and still end up with money in the bank at the end of the year.

Your Client is Facing a Rising MOD Score

What happens when your client has had a few too many incidents over the past year and is facing a rising experience modification rating and, as a result, rising premiums?

You can sit back and let her workers’ comp premiums increase. You can make suggestions about worksite safety programs. Or you can present her with another option:

A PEO partnership.

Many PEOs have an appetite for higher-than-average MODs. Not only that, but many offer risk management services that can help your client overcome a bad year of workers’ comp claims.

PEOs who offer risk management services can provide her with:

  • Written safety programs/ manuals
  • Comprehensive safety inspections and worksite safety reviews
  • Safety action plans
  • CAL-OSHA consultations
  • Accident investigations
  • Occupational training as required by law/ industry
  • Workers’ injury claims administration

Without the help of a PEO, your client could be facing rising rates or even a non-renewal after a bad year full of workers’ comp claims.

With the assistance of a PEO partnership, your client can be on her way to an injury-and claim-free year next year.

Bringing both options to her while she still has time to consider them in depth and make a decision makes you a thorough and courteous agent with the best interest of her business in mind - a trait that she will remember.

Tailored Solutions Partners with Insurance Agents

At Tailored Solutions, we don’t believe that PEOs and insurance agents need to compete for the business of their clients. We’ve built a business where independent agents are our valued partners for the benefit of all.

We specialize in alternative markets to help you place workers’ compensation that would otherwise go to the state fund. Our agent partners receive competitive commissions for referring a client to us. The commissions are non-diminishing and last as long as your client maintains their PEO partnership.

We offer workers’ compensation insurance, risk management, and payroll administration for your clients.

Our Process

If you think a PEO partnership can help your client with their workers’ compensation challenges, our process is easy, streamlined, and designed to help you in every step of the way.

Here’s how it works:

  1. We shop the PEO market and return a competitive quote to you.
  2. We provide sales assistance, onboard the client, and service the account.
  3. You become the broker of record and begin receiving commissions.

We shop the PEO market and return a competitive quote to you.

You only have to make one submission and we’ll shop the PEO markets on your behalf. You don’t have to know which PEO is right for your client’s specific industry or specialty - that’s our job. We work with dozens of top-rated carriers and have the experience with the companies and their underwriting guidelines. We provide fast underwriting and one-day price indications, so you don’t have to wait around for a PEO quote for your client.

We provide sales assistance, onboard the client, and service the account.

Our professional and dedicated team is here to help you every step of the way. We can help you understand the details of the quote so you are prepared to present to your client. During the presentation, we can provide a sales agent for a virtual meeting in your office, your client’s place of business - wherever you need to be.

Your sales assistant will be there to fully explain every aspect of the quote and PEO process, so you’re not left with a client who has answers you’re not prepared for.

Once your client agrees to a PEO partnership, our team of professionals will take care of onboarding and service the account.

You can move on to taking care of your client’s other insurance needs.

You become the broker of record and begin receiving commissions.

Our insurance agent partners love that we pay competitive, ongoing, and non-diminishing commissions. As long as the client maintains their PEO partnership, you’ll remain the broker of record and continue to receive the same commission. It will never go down and no other broker can take it from you.

We’re here to increase your commissions and provide you with an alternative market to the state fund when your clients have workers’ comp challenges. When you turn to Tailored Solutions for a PEO solution to your client, you’re not giving away business to the competition. You’re making a smart move that helps you build your book of business.

Become a Producer.