The client policy is an individual policy written for
you, but administered by the PEO company. These policies
are portable and allow for the continued
development of your NCCI experience rating. We
advise employers with good modifiers to keep
their existing policy in case the PEO company's modifier
increases or they leave the PEO relationship. This
is also known as a work comp carve-out.
A master policy means the provider insures all their
clients through a licensed carrier that is fully insured
at "first dollar coverage" for claims made. First dollar
coverage means the carrier pays all expenses for any
claims. The policy is written under the PEO company's Federal
employer identification number (FEIN) and they
maintain the experience rating.
Master Deductible Policy-
A master deductible policy is similar to the master
policy, except the PEO service is responsible for claims up
to a certain limit (deductible) per claim with an
aggregate limit to limit their exposure. PEO providers with higher deductible policies tend to
have more flexibility in the clients they can write,
since they have more risk involved.
A captive policy works when a separate insurance
company is set up by the PEO provider through
another licensed carrier (a.k.a. “fronting company”)
for the purpose of writing insurance under the captive.
The PEO company and fronting carrier share expenses, profits,
and losses developed within the policy.