How Does a PEO Evaluate a Company?
The Criteria Underwriters Use to Judge Your Business
Before a PEO quotes you a price, an underwriter evaluates your company across a set of standard criteria. The evaluation covers your industry, your payroll, your loss history, your financial health, and your compliance record. The better you understand what the underwriter is looking for, the better you can prepare your file and the better your pricing will be.
Core evaluation criteria
Years of loss history reviewed
Of pricing tied to evaluation
To get an evaluation through us
Key Underwriting Factors
Industry and Class Codes
Your industry and workers comp class codes set your base rates. Misclassified employees lead to bad quotes and surprises at audit.
Employee Count and Payroll
Your headcount and total payroll drive your pooling power and your base fee. Larger payrolls get better per employee pricing.
Loss History
Three to five years of loss runs show your actual claims experience. A clean loss history is the fastest path to better pricing.
Financial Stability
Your revenue, cash flow, and tax payment history tell the PEO you can pay your ongoing obligations without default.
Compliance Record
Prior payroll tax liens, OSHA violations, or employment claims signal risk that underwriters price in or decline.
Current Benefits Setup
Your current health plan, participation rates, and employer contribution affect how the PEO prices your benefits.
The 6 Criteria a PEO Underwriter Evaluates
Every PEO underwriter evaluates your business against a standard set of criteria. The weight each criterion carries varies by PEO, but the categories are consistent across the industry. Knowing these criteria lets you walk into the evaluation prepared instead of hoping for the best.
- Industry classification and workers comp class codes
- Employee headcount and total annual payroll
- Three to five years of workers comp loss history
- Financial stability and tax payment record
- Compliance history including tax liens and violations
- Current benefits setup and employee demographics
How the Evaluation Actually Works
The evaluation starts when you submit a complete application. The underwriter reviews your employee census, your industry classification, and your payroll data. Then the underwriter pulls or requests your loss runs from your current carrier. Next the underwriter reviews your financials and compliance history. Finally the underwriter builds a risk profile and sets pricing. The process takes 3 to 10 business days when your file is complete. Incomplete files are the number one cause of delays.
What Comes Out of the Evaluation
The evaluation produces one of three outcomes. The PEO issues a quote with specific pricing. The PEO requests more information because something in your file is missing or unclear. Or the PEO declines your business because your risk profile does not fit its guidelines. A decline is not final. A different PEO with a different risk appetite may welcome the same business. A broker shops your evaluation across multiple PEOs so a decline from one does not stop your process.
PEO Evaluation FAQ
What does a PEO look at when evaluating my company?
How long does a PEO evaluation take?
What makes a PEO decline a company during evaluation?
How can I improve my PEO evaluation?
PEO Underwriting Guides
What Is PEO Underwriting?
What PEO underwriting is and why it decides your pricing.
What Affects PEO Pricing
The factors that drive your PEO pricing up or down.
Why PEO Quotes Vary
Why different PEOs quote different prices for the same company.
Why Did My PEO Decline My Company?
Common reasons PEOs decline businesses and what to do next.
High-Risk PEO Underwriting
How high-risk businesses get underwritten by a PEO.
PEO Workers' Comp Underwriting
How PEOs underwrite workers' compensation risk and pricing.
PEO Benefits Underwriting
How PEOs underwrite health and benefits risk for your group.
PEO Financial Underwriting
How PEOs assess your financial health before quoting.
Experience Modification and PEO Pricing
How your EMOD factor affects your PEO workers comp pricing.
What Financial Info a PEO Requires
The financial documents a PEO needs to underwrite your business.
Why PEOs Request Loss Runs
What loss runs reveal and why every PEO asks for them.
How to Prepare for PEO Underwriting
How to prepare your business for a PEO underwriting review.