Professional Employer Organizations

Insurance Coverage for the Operations of Professional Employer Organizations

Over the last few years, professional employer organizations (PEOs) have worked to provide expert administrative assistance for employers and organizations around the country. While there is often a demand for human resource services, these organizations are also known for offering the following services to corporate clients:

  • Tax administration
  • Employee benefit
  • Payroll services
  • Regulatory compliance assistance

Potential Complications

Although the wide of range services can be very straightforward, the co-employment agreements between the PEO and their clients can be very complex. Given state and federal requirements for employee treatment, as well as the individual obligations that each entity has with the employee, there are several types of risks that need to be addressed through insurance coverage.

Basic Insurance Needs

Like any business, the experts at advise on the basic need for a commercial insurance policy that can protect from liabilities associated with fire, weather events, slips, falls, office injuries, professional services, and cyber threats. In order to address these areas, PEO insurance should include commercial property, commercial general liability, and errors and omissions insurance. Depending on the composition of the company, there may also employee benefits or worker’s compensation requirements that need to be met.

Meeting the insurance obligations of a PEO should be done through a broker that understands the areas of exposure and risks of this unique industry. Relying on your own ideas about coverage could leave you susceptible to legal action by occasions of loss, in addition to fines or fees for non-compliance with government regulations.