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No matter the size of your organization, having workers’ compensation insurance is imperative for protecting both you and your employees. While large corporations can benefit from long-term workers’ comp contracts, as a small or mid-sized business, that isn’t your only option.


As a business owner, how do you know when it might be time to transition out of your long-term workers’ comp coverage? When you’re ready to make the change, what steps should you take?

Why it might be time to shift to short-term workers’ comp

Why it might be time to shift to short-term workers’ comp

For large corporations, long-term workers’ compensation coverage might make sense. Big companies typically have the extra funds to handle the costs of workers’ compensation. They also typically implement regular safety training programs to keep employees up-to-date with protocol and less likely to file a claim.


Small and mid-sized businesses are less likely to have the added funds to handle the financial burden that workers’ comp can bring. Premiums can rise after filing a claim—and even moreso after filing multiple claims—which can negatively impact businesses that may not have the resources to absorb the cost.

You won’t be paying for more coverage than you need

If you own a business that hires on a project-by-project basis, paying for long-term insurance may be much more than you need. Many PEOs (professional employer organizations) offer pay-as-you go workers’ compensation programs.


Pay-as-you-go programs are incredibly flexible in terms of the type of coverage you have as well as the length of time you have it. This means that whether your project lasts a couple of week or a couple of months, your workers will be covered.

You’re in a high-risk industry

In some situations, jobs that have a higher risk of injury or illness, may not be able to get the coverage they need. Construction, roofing, painting, and trucking are all considered risky due to the nature of the work they entail. When high-risk companies are able to get coverage, however, their workers’ comp premiums can be incredibly pricey.


If you own a small business and you want the benefits of coverage for yourself and your workers, no matter what industry you’re in, without paying for more than you need, it might be time to shift to short-term workers’ compensation.

What to do when you’re ready to transition to short-term coverage

Find a company that fits your needs

When you’ve decided that a short-term workers’ compensation policy is the right choice for your business, it’s time to find a provider that fits your needs. Are you looking for a PEO that can potentially help in other areas of your business as well—from payroll to human resource services? Or are you solely looking for support with workers’ compensation? Do some research to determine which companies offer help specifically with what you’re looking for.

Get a quote for new coverage

When you’ve found a company—or a few companies—that seem to fit your requirements, request a quote. Getting quotes from multiple companies is a great way to compare coverage, cost, and the level of support you’ll be receiving along the way. Be ready to anser some questions about your business in order to get your quote.

Cancel with your current provider

When you’ve made your final decision, your new provider will likely send a cancellation request to your previous workers’ compensation agency, and you can typically sign everything electronically. After the cancellation goes through for your previous insurance, you should be set on your new coverage.

A final note

There are many reasons why short-term workers’ compensation is gaining popularity, so be sure to explore your options to find what’s right for you. If you’re a small business, own a high-risk company, or hire on a project-by-project basis, short-term workers’ compensation could make a lot of sense for your business.


When you’ve decided to make the switch, do some research to find a company that’s right for you, request a quote, and find coverage that’s tailored specifically to what your small business needs.