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 other general business insurance policies.
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)
Insurance Premium Funding (IPF) allows you to split your insurance payments into manageable monthly repayments that won’t impact your business cash flow in the same way a large annual lump-sum payment can.
Basically, any business with insurance premiums exceeding $5,000 may be able to use IPF.
Insurance premiums are normally financed over eight to ten months to ensure the premium is fully paid before renewal, and there is generally no security required.
For businesses managing multiple financial obligations, solutions that improve cash flow can help free up capital for growth opportunities and day-to-day operations. Businesses may also consider options such as cash flow funding depending on their circumstances.
Workers comp early bird payment discounts
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 may be entitled to early payment discounts.
However, workers compensation premiums generally need to be paid in full before the applicable due date in order to qualify.
By using Insurance Premium Funding to make the payment upfront, businesses may be able to secure those savings and offset part of the cost of funding.
Taking this option can also improve cash flow by allowing working capital to remain available for operational and income-generating activities.
Find out more by getting in contact with the QPF Insurance Team
If you’d like to learn more about Insurance Premium Funding, get in touch today — especially if you’re wanting to remain eligible for workers compensation early payment discounts.
The QPF team is here to help your business find solutions that improve cash flow and reduce financial pressure.
