Pay-As-You-Go Workers’ Compensation: Reducing Premium Audit Risk

Workers’ Compensation insurance is a particular challenge for security guard firms because year-end premium audits can create major cash-flow swings.

What is a Premium Audit and how is it disruptive to security businesses?

A Workers’ Compensation premium audit is a year-end review where the insurer compares your estimated payroll to what you actually paid and then retroactively adjusts your premium accordingly. These audits often expose one of two costly problems – starting with the most painful: not paying enough throughout the year. When payroll is underestimated, the audit can trigger a large, unexpected insurance premium bill that hits all at once, straining cash flow and disrupting operations. On the flip side, firms that overestimate payroll to avoid this scenario end up paying too much, tying up cash throughout the policy period that could have been invested back into staffing, equipment, or growth. Either outcome makes Workers’ Compensation uniquely challenging for security companies operating on tight margins.

How is Belfry taking steps to alleviate premium audit risk for its customers?

To address these challenges, Belfry has partnered with Willis Towers Watson (NASDAQ: WTW, “Willis”), one of the world’s leading global insurance brokers, and Kayna, an embedded insurance technology platform, to create a program tailored specifically for security firms. A key advantage of this program is access to pay-as-you-go Workers’ Compensation, helping Belfry customers avoid the costly surprises that year-end premium audits can bring. ‍

Please note that access to pay-as-you-go Workers’ Compensation is subject to underwriting approval on a company-by-company basis.

How does pay-as-you-go work?

With pay-as-you-go Workers’ Compensation, premiums for security guard firms are calculated and paid using actual employee hours by class code each payroll period, ensuring you only pay insurance on actual hours worked. This is a modern approach to insurance, as instead of relying on annual estimates, premiums are billed based on incurred hours – meaning no big upfront payments, no surprise audit bills, and coverage costs that automatically adjust as you staff up or down. This approach makes Workers’ Compensation more predictable and cash-flow friendly for security firms.

How to Access pay-as-you-go Workers’ Compensation through Belfry:

All Belfry customers have access to the Workers’ Compensation application directly in their login portal. Once an application is submitted, Willis handles the process to ensure white glove insurance support for Belfry customers.

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