Professional Employer Organizations provide companies with essential services, such as payroll, regulatory compliance consulting and Human Resources solutions. The structure of the contract between companies, which may include a sharing of some duties, exposes both parties to potential liability. This unique arrangement requires specially-designed insurance coverage.
Insurance Designed for Professional Employer Organizations
PEO insurance should be tailored to the specific needs of each business, but coverage should protect against some common risks faced by PEOs. Packages should consider the following coverage:
- Commercial property insurance – This policy covers damages to your building and the contents within, such as equipment, office furniture and computers. It typically includes damage due to fire, weather events and vandalism.
- Commercial general liability insurance – This broad coverage protects against lawsuits resulting from injuries on the property.
- Business interruption coverage – In the event operations must temporarily cease due to property losses covered in the policy, this clause helps to cover payroll and expenses to relocate.
- Errors and omissions protection – Claims filed by a client may include alleged errors in work provided or claims of negligence. This is especially critical coverage for PEOs, due to the nature of the partnership with clients.
Employment practices coverage – This plan protects against claims of harassment, discrimination and failure to hire.
PEOs provide critical services to their clients. They must maintain adequate insurance protection to stay afloat.