713-231-0740 PayAsYouGo@AIMins.net

If you run a business that already carries a worker’s compensation insurance coverage, you are probably very familiar with the audit process.

You are probably asking yourself ….

  • “How can I avoid another big audit?”
  • “How can I improve my cashflow?”

Have you ever heard about Pay-As-You-Go?

Not yet?

In this blog post I will give you more information about Pay-As-You-Go and the benefits this method has.

What is Pay-As-You-Go?

As an upfront clarification, Pay-As-You-Go is NOT workers’ compensation insurance, is merely a method of payment for workers’ compensation offered by some insurance companies.

Knowing this, your business should be concerned about how it pays for insurance because it affects your bottom line.

Pay-As-You-Go workers’ compensation insurance has recently been making waves in the insurance market, particularly in the state of Texas.

More and more small businesses are realizing the immediate potential for insurance savings.


Under Pay-As-You-Go, insurers calculate your premium based on real-time payroll versus traditional workers compensation that is based of an initial estimate.

Converting your workers’ compensation policy to Pay-As-You-Go can provide many direct and distinct benefits, such as:

  1. No Upfront Cost
    • The first benefit is that with Pay-As-You-Go there are no large deposits up front.
    • Additionally, premium payments are synchronized to your payroll cycle and there’s no fixed schedule of payments.
    • This is a major advantage to businesses who need more readily available liquid capital to make inventory purchases or hire new staff.
  2. No More Estimates
    • Traditional workers’ compensation premiums are calculated based on an annual payroll estimate that does not account for mid-year staffing changes.
    • Pay-As-You-Go adjusts premiums automatically based on your payroll.
  3. Seasonality
    • Most businesses tend to have fluctuating payroll throughout the year, but traditional worker’s compensation requires fixed monthly premium. This means, no break during low seasons, affecting your cashflow.
    • Pay-As-You-Go responds to your seasonal staffing needs giving you more frequent and smaller premium payments that is synchronized to your payroll, allowing your cashflow to be as seasonal as your payroll.
  4. Audit Accuracy
    • While Pay-As-You-Go insurance plans still require an annual audit, it is normally painless compared to a traditional insurance audit.
    • Because of how Pay-As-You-Go works, your insurance is, in a sense, being audited throughout the year based on payroll changes.
    • This makes it much less likely that your business will have an extra bill or payment after the expiration of the policy after an audit.

The quality of your insurance coverage is important. How you pay for is important too.

Considering how you pay for your workers’ compensation insurance can save you money down the line and also remove a major headache at the end of each annual audit term.

Find out more about Pay-As-You-Go benefits and how Associated Insurance Managers makes it easy to switch.