12 Mar How Staffing Companies and PEOs Benefit From Working With An Industry-Specific Workers’ Compensation Broker

Workers’ compensation insurance is one of the largest expenses for staffing companies and professional employer organizations (PEOs). Due to the high-risk nature of temporary staffing, complex employee classifications, and frequent policy audits, securing cost-effective and compliant coverage can be a challenge.

Many staffing firms turn to insurance agents for coverage, but working with a broker who specializes in the staffing industry provides significant advantages. Unlike general insurance agents, an industry-specific broker understands the unique risks, regulatory requirements, and cost-saving strategies tailored to staffing businesses and PEOs.

What Makes a Broker Different from an Agent?

The key difference between an agent and a broker is who they represent:
• Agents work for insurance carriers and can only offer policies from the companies they are contracted with.
• Brokers work for you, the business owner, and shop across multiple carriers to find the best coverage, pricing, and risk management solutions.
Agents are a good bet for those who are partisan to a brand, i.e., Travelers Insurance. However, when dealing with an industry as complex as staffing, a broker who specializes in your field is invaluable, and here’s why:

Six Benefits of a Staffing-Specific Workers’ Comp Broker

1. Access to Exclusive Staffing-Focused Insurance Programs
Many standard insurance carriers either decline to cover staffing companies or charge excessive premiums due to perceived risk. A broker with staffing industry expertise has relationships with specialized workers’ comp providers that offer tailored programs for temporary staffing, contract employees, and professional employer organizations

These exclusive programs often include:

✔ Better rates than standard market carriers
✔ More favorable pay-as-you-go premium structures
✔ Coverage flexibility for multi-state operations
✔ Understanding of temp worker misclassification risks

2. Expertise in Employee Classification and Cost Reduction
One of the biggest mistakes staffing firms make is misclassifying employees, which leads to higher premiums and potential fines. A staffing-specific broker ensures that each worker is classified correctly based on their actual job duties, not just a broad industry code.

By properly categorizing workers, a broker can:
✔ Prevent overpayment due to improper classifications
✔ Help staffing firms qualify for lower-risk class codes
✔ Assist in adjusting classifications as workforce needs change
This precision can save thousands of dollars annually in premium costs.

3. Proactive Risk Management to Lower Claims Costs
For staffing firms and PEOs, workers’ comp claims can quickly spiral out of control, leading to increased experience modification rates (EMR) and skyrocketing premiums. A specialized broker doesn’t just sell you a policy—they help reduce claims by implementing industry-specific safety and return-to-work programs that directly impact your costs.

They can provide:
✔ Best practices for on-site safety at client locations
✔ Training on injury prevention for temporary employees
✔ Assistance in developing a modified duty/return-to-work program
✔ Claims advocacy to prevent fraudulent or exaggerated claims

4. Handling Multi-State and PEO-Specific Compliance Challenges

Staffing companies and PEOs often operate across multiple states, each with different workers’ compensation regulations. A general insurance agent may not understand the complexities of multi-jurisdictional compliance, but a specialized broker ensures that coverage meets each state’s specific requirements.

For PEOs, a staffing-specific broker helps navigate:
✔Client-based versus master policy structures
✔State-by-state regulatory differences in coverage requirements
✔Ensuring client co-employment risks are properly addressed

5. Audit Assistance and Premium Accuracy

Many staffing firms face surprise workers’ compensation premium audits that result in unexpected charges due to estimated payroll discrepancies or improper worker classifications. A staffing-specialized broker helps businesses prepare for and navigate audits to minimize costly adjustments.

They assist with:
✔ Ensuring payroll projections are accurate before policy issuance
✔ Reviewing audit findings for errors that could lead to overbilling
✔ Negotiating with carriers on disputed audit results

6. Negotiating Competitive Pricing with Carrier Leverage
Because staffing-specific brokers work with multiple insurers that specialize in staffing and PEOs, they have leverage to negotiate better rates. Unlike agents who only sell a limited number of policies, brokers can shop policies across many carriers and recommend the most cost-effective option.

They also help staffing firms take advantage of:
✔ Dividend programs that return a portion of premiums based on claims performance
✔ Pay-as-you-go billing options to improve cash flow
✔ Group purchasing programs that lower rates for staffing companies

Why a Staffing-Specific Broker is the Best Choice for Your Business
A traditional insurance agent may provide a basic policy, but they don’t understand the nuances of the staffing industry. With high turnover, multi-state challenges, compliance complexities, and claims management hurdles, staffing firms and PEOs need more than just coverage—they need a strategic partner.

A staffing-focused broker offers:
✔ Industry expertise that ensures optimal coverage and cost savings
✔Claims management support to reduce EMR and long-term premium costs
✔Regulatory compliance guidance to prevent audits and fines
✔Access to staffing-exclusive insurance programs
For staffing agencies and PEOs looking to control costs and reduce risk, a specialized workers’ compensation broker is the key to long-term success.

Next Steps
If you’re struggling with high premiums, complex claims, or compliance headaches, partnering with a staffing-specific workers’ compensation broker can help optimize your insurance strategy.
Would you like a free review of your current policy to see if you’re overpaying? Contact a Barrow Group broker today at 800-874-4798 or go to www.barrowgroup.com and schedule a consultation.