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Frequently Asked Questions
Payroll
Our Brokerage strongly recommends against using Dual Basis Payroll. For small to medium businesses there is little saving in premium and many employers won’t make staff redundant, then re-employ and re-train . It complicates a claim. What are your thoughts?
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We generally agree and recommend the same. It should only be used for larger businesses with long Indemnity Periods and where a significant saving in premium can be demonstrated.
Under a dual basis payroll methodology what would happen if there was a payroll saving in first period and the intention was for the saving to apply later in the Period of Loss however the business was up and running earlier than thought i.e. the Period of Loss finished earlier than expected. Does the insured get paid for those unused savings?
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No. They are only indemnified for ongoing expenses which are incurred.
The Insured must always act in a manner to mitigate their loss.
Would it be always better for the client to insure 100% of payroll rather than dual payroll?
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Yes, it is advisable to insure 100% payroll and as a part of gross profit. The Dual Basis Payroll approach is complicated.
For smaller businesses we would not generally recommend a Dual Basis Payroll approach.
Dual wages should be considered when the Insured’s workforce is flexible and the Indemnity Period is longer i.e. 24 months.
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