Professional employer organizations (PEOs) have evolved dramatically over the years into a wide array of groups that offer staffing and human resources services to other businesses. While many PEOs resemble traditional staffing companies, others function like outsourced human resources departments.
In most cases, PEOs offer some type of human resources services, typically for small businesses that lack the resources to perform some of the tasks in-house. If you operate a PEO, you are likely to offer payroll services, employee benefits services, tax administration services, and other HR functions to your corporate clients.
The only common characteristics shared by PEOs are that they are complicated. Most PEOs ultimately enter into co-employment agreements with their clients. Each party will have certain obligations to employees that they must fulfill, greatly impacting employer/employee relationships and playing a significant role in the types of risk that the PEO takes on.
It is these contract specifics that determine what kind of insurance a PEO needs in order to protect itself and individual employees from employment-related claims.
Most PEOs also need basic business insurance to protect against some fairly common perils. A variety of commercial insurance policies are available to protect you from the risks you face, including:
Professional employer organizations need a variety of basic commercial insurance policies to cover common risks.
Commercial general liability (CGL) insurance provides broad coverage for lawsuits that may be filed against your business. It helps you pay for direct costs related to a claim (e.g., medical expenses, repairing or replacing damaged property) as well as your legal defense if you are sued.
Commercial property insurance is also essential for a PEO. Whether you own your building or lease your office space, commercial property insurance covers damage to a building and its contents (computers, office equipment and furniture, supplies, fixtures, etc.) if it is damaged by a weather event, fire, theft, vandalism, and other causes of loss. Most business property policies also offer coverage for business interruption, which helps you pay for ongoing expenses if you must temporarily close or relocate due to a covered property loss (e.g., a fire).
Professional liability (or errors and omissions) insurance provides protection if a client sues you for negligence or other wrongdoing related to your work. Professional liability policies provide coverage for:
Most importantly, PEOs need to provide certain types of coverage for individual employees. Depending on the contract specifics, the PEO may retain the role of the employer and must take on some or all of those obligations.
One of the most important employer obligations is workers’ compensation insurance. This is essential employee coverage that pays for employee medical bills and lost wages if they are injured on the job. It is required for nearly all employers in most states.
Depending on the specific contract, either the PEO or the corporate client will be responsible for providing workers’ compensation insurance, although in some cases, both parties provide coverage that works in tandem. Your PEO contract may also require you to provide employee benefits for your “shared” employees.
There are a variety of other PEO insurance policies that may be needed. An independent insurance agent can help you decide if you need policies like:
Predicting insurance costs for PEOs is difficult because they come in all shapes and sizes and perform varying functions based on their contractual obligations. What you pay will be influenced by the size of your business, the number of employees, the location of your office space or building, the amount of business property on your premises, and more.
An independent agent can help you uncover your risks and determine the types of PEO insurance policies you need to fully cover your assets. Independent agents can work with multiple insurance companies, so you’ll be able to find tailored coverage you can afford.
Our agents simplify the search process for finding the right PEO insurance. They’ll walk you through some handpicked policy options and explain the details in language you can understand.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
Online insurance quotes can be tempting. They are fast and easy to get—but are they accurate? And are you sure you are getting the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, work with an independent agent. Your agent can provide one-on-one consultation and affordable options for the best coverage for your unique needs.