Startup Insurance Coverage: How PEOs help new businesses obtain insurance

When entrepreneurs launch new businesses, they’re generally not fantasizing about handling administrative tasks or sifting through paperwork. Rather, their focus is on doing whatever they can to ensure their endeavor is successful, profitable, and sustainable.

Navigating the Regulatory Landscape As a Startup

There are rules and regulations that business owners must adhere to in order to comply with state and federal laws, especially when it comes to carrying various insurance coverages for their employees. In most industries and trades in Florida, as soon as you get to four full or part-time employees, you must have workers’ compensation coverage. This vital coverage can present a challenge because many insurance companies may not feel comfortable providing coverage to a startup due to a lack of a proven track record and zero claims history. 

An All-in-one Solution For Startups:

So, what’s the solution for the 500,000-plus new businesses that are created each month and requiring different commercial insurance coverage and administrative support? The solution could lie in hiring a PEO (Professional Employer Organization) to help accelerate the process of acquiring insurance coverage. 

A PEO is a single-source provider of integrated business services that enables business owners to responsibly and cost-effectively outsource employee management activities such as human resources, administrative duties, and additional employment-related tasks.  By partnering with a PEO, business owners can work more efficiently, stabilize their cash flow, and solely focus on scalable growth while the PEO handles all of the behind-the-scenes work associated with employee management.

How Can a PEO Help My Startup Scale Efficiently?

Let’s break it down a little more. As a business grows, the back-office duties and expenses increase exponentially. Business owners must not only focus on recruiting and onboarding the right people, but they also must spend time and money on establishing a sound HR-related infrastructure to support them. Oftentimes, that means shifting attention away from revenue-producing activities and potentially losing out on lucrative deals. Hindering the companies long-term growth. 

If you find yourself in this situation, hiring a PEO can take a lot of weight off your shoulders, especially when it comes to insurance. You don’t have to have any type of history with workers’ compensation insurance because the PEO has already built one. Additionally, there’s no deposit, no audit and you pay as you go. This means you don’t have to make a down payment on the premium, something that’s hugely beneficial during a time when you may not have a lot of extra money laying around.

Additional Support a PEOs provide Startups:

• Payroll and payroll tax compliance
• Risk management
• Health insurance
• Ancillary Benefits
• Compliance with state and federal labor laws
• Drug screenings
• FMLA administration
• Workplace safety
• State unemployment and workers comp claims
• Wellness programs 

The Proof Is in The Numbers: PEOs Increase Growth

According to a recent survey, small businesses that use PEOs grow seven to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business than their counterparts who choose to go it alone. Therefore, it’s no wonder that industry leaders in construction, hospitality, manufacturing, health services, and staffing have come to rely on PEOs to support their growth and help them reach the next level, who knows you may even be one of the startups that get bought out for billions. If you’re helming a startup, hiring a PEO might be one of the best decisions you ever make.

If you’re starting a new business, the team of professionals at AXIS Group is here to answer all your questions and help you determine if a PEO is right for you. Contact us via phone or email by clicking here.