Getting a bill in the mail is never pleasant, but your annual insurance and workers compensation premiums can be particularly tough lump sums to swallow. There is, however, an affordable financing option that can limit the impact on your business’s cash flow. Let’s take a look.
Most businesses have expensive annual insurance premiums to pay, whether they be for professional indemnity insurance, product liability insurance, public liability insurance, or any other general business insurance policy.
Throw your workers compensation premiums into the mix and these obligations can become quite the annual financial hurdle to overcome.
Fortunately, a financing option exists that can smooth out your cash flow headache and help you become eligible for an early bird discount on your workers compensation premium.
Insurance Premium Funding (IPF)
IPF allows you to split your insurance payments into manageable, affordable, monthly amounts that won't cripple your cash-flow like an annual lump sum payment can.
Basically, any business that has an insurance premium of more than $5,000 has the ability to use IPF if they need to.
The insurance premiums are normally financed over 8 to 10 months to ensure the premium is fully paid before its renewal, and there is generally no security required with IPF.
Workers comp early bird payment discount due soon
One insurance premium that IPF is commonly used for is workers compensation.
That’s because in some states (including NSW, Victoria and Queensland), employers who pay their annual premium in full are entitled to a 3% to 5% early bird discount.
But here’s the catch: workers comp premiums need to be paid in full before the early bird due date (typically around August/September) in order to receive the discount.
By using IPF to make this payment upfront you can secure the early bird discount, which helps to offset the cost of IPF.
Taking this option will also improve your business’s cash flow, allowing you to redirect capital into income-generating investments.
Find out more
If you’d like to find out more about IPF then get in touch today - especially if you want to be eligible for the workers compensation early bird discount. We’re here to help your business any way we can.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
