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Whether you own a small business or a large company, workers’ compensation insurance is crucial for protecting your employees as well as yourself as a business owner. As important as it is to have workers’ compensation, it can get pricey, so it’s a good idea to understand what makes the most sense for your workers and the type of business you own. Let’s dive into what short-term workers’ comp insurance entails, how it differs from long-term coverage, and what to expect when calculating premiums.

Why is worker’s compensation important?

No matter how careful you or your employees are at work, accidents happen every day. Workers’ comp helps protect your workers financially if they get injured on the job. In most cases, if the injury or illness is a direct result of their job, workers’ comp will cover medical and rehabilitation expenses as well as lost wages during the recovery process.


Without workers’ compensation insurance, if an employee gets hurt at work or becomes ill because of the work they do, the business owner could be expected to pay out-of-pocket for their medical bills. For small business owners, it may feel like workers’ comp is unnecessary, but when it comes to the safety of your employees and your business, it’s always a good idea to cover all your bases.

What is short-term workers’ comp?

In many cases, workers’ compensation insurance requires long-term contracts. While this works well for many people, contracted workers, seasonal employees, or anyone who works on a project-to-project basis may benefit from other options. Short-term coverage is temporary, so no contracts are required, and you’re able to get the coverage you need for the amount of time you need it.


Professional employer organizations typically offer pay-as-you-go programs for workers’ comp. This means you can choose exactly how long you’d like the insurance to be in place—whether it’s just a few days or several months. Pay-as-you-go programs are incredibly flexible in terms of coverage and duration, and they’re tailored to meet your needs.


Additionally, you can deactivate and reactivate your short-term workers’ compensation insurance at any time, so you won’t have to go through the application process all over again after your coverage has been on hold. You can simply put the same coverage you previously had back into effect when you need it.


Temporary workers’ compensation also offers the same level of coverage companies can get with long-term insurance. You can rest assured knowing you and your employees will be taken care of if anything happens on the job.

Understanding premium calculations for short-term workers’ comp

The first thing taken into consideration for short-term workers’ compensation premiums is the industry of the employer. A construction company, for instance, will likely see higher rates than a telemarketing company. Additionally, high-risk occupations typically have higher workers’ compensation rates than those that are low-risk. This means that a truck driver will likely have a higher rate than the dispatch operator of the same company.


Payroll and the number of employees you have can also affect workers’ comp premiums. Your claims history will also play a role in determining your rate.

For business owners interested in shifting away from long-term workers’ compensation, partnering with a PEO can be a good choice. Professional employer organizations often work with small businesses, which means they’re able to pool their clients together to help get better rates. Flexible pay-as-you-go programs are a great way to reduce costs while getting exactly what you need.

Choosing short-term workers’ compensation for your small business

While it is worth it, workers’ compensation insurance can be somewhat complicated when doing it all on your own. By working with a PEO, you can trust that the complexities of workers’ comp will be handled by experienced professionals and that you’ll get the best possible coverage to meet your needs.


Employees of small businesses of all types—from construction workers and painters to truck drivers and restaurant employees—can benefit from short-term coverage. Understanding premium costs and what temporary coverage entails is crucial when considering short-term workers’ compensation insurance for your small business.