Professional Employer Organizations (PEOs) wear several different hats. Some operate as traditional staffing agencies while others essentially exist as subcontracted human resources departments.
With Responsibility Comes Increased Exposure
Smaller companies often turn to a PEO for essential employee services, such as benefits administration, payroll and tax administration, workers compensation and training/development. Often the PEO enters into a co-employment contract, whereby it becomes the employer of record and shares obligations — and exposure to potential liability claims — with the client company.
Considering the risks involved, it is essential that the organization protects itself with a comprehensive package of PEO insurance. The PEO’s specific role will help to determine the coverage needed, but most, at the very least, will require a business policy that includes property, general liability and errors and omissions insurance that is tailored to the profession.
Most PEOs should consider far more inclusive PEO insurance coverage. Here are some of the more common coverage options:
- Workers compensation (depending on the contract, either the PEO or the client company, or both, will be responsible for this insurance that is required by law in every state)
- Employee benefits liability
- Cyber liability
- Business auto
- Directors & officers
- Business income interruption
- Employment practices liability
- Hired and non-owned auto
Protect the financial security of your PEO. Consider a comprehensive package of commercial insurance that limits exposure to common liability risks.