Master Policy vs Your Own Workers Comp Policy
Under a PEO master policy you ride their carrier, their claims handling and often their pricing leverage - but their loss history discipline too. Your own policy keeps everything in your name. The trade is simplicity versus control.
What actually changes
| Dimension | Master policy (PEO) | Own policy |
|---|---|---|
| Named insured | The PEO; you are covered via agreement | Your company |
| Premium basis | Pooled program, billed per payroll | Carrier quotes your payroll + class codes |
| Claims handling | PEO's risk team manages | You + your agent/carrier |
| Experience rating | Losses may follow you on exit | Your mod, your history |
| Audits | PEO-run, passed through | Yours to manage |
Where the master policy wins
High-risk industries gain most: pooled buying power, in-house safety programs, and claims teams that handle disputes daily - FrankCrum and BBSI built entire models around owned or deeply integrated comp programs. For volatile payroll, per-cycle premium billing also smooths cash flow versus deposit-based own policies.
Where your own policy wins
Clean loss histories get rewarded directly instead of pooled into someone else's average. And control stays yours: carrier choice, deductible strategy, and no dependence on the PEO relationship for continuous coverage. If you leave a PEO, rebuilding coverage is immediate rather than negotiated - see how losses follow you either way.
Verify before choosing
- Which carrier issues the master policy, and its AM Best rating.
- How open claims transfer if the arrangement ends.
- Who controls the experience modification at exit.
Next
Frequently asked
Do I still need my own policy under a PEO?
No - the master policy covers statutory obligations. But confirm your state recognizes the arrangement and get certificates naming requirements your clients demand.
Can bad claims under a master policy raise my costs?
Yes - through program repricing or, on exit, through loss history that follows to your new policy.
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