A professional employer organization or PEO provides comprehensive business solutions to small and medium-sized companies. These organizations often perform various administrative tasks such as payroll, HR benefits, and other regulatory services, making them prone to unique risks. This is why PEOs require precise insurance coverage to protect their financial assets, and here’s why.
Unique Risk and Exposure
Often PEOs have contracted clients with shared responsibilities that expose them to many unique risks. However, when adequately insured, employer organizations can mitigate financial stress with the following insurance products:
- Errors and omissions
- General liability
- Employment practices liability
Errors and Omissions
Since PEOs provide many different services, errors and omissions insurance or E&O insurance coverage may be beneficial to protecting financial assets. This insurance option is liability coverage that guards companies against human negligence. Additionally, this insurance option reimburses business owners for court and settlement costs.
General Liability Insurance
General liability insurance is essential for business operations in that it protects companies from claims associated with personal injury, property damage or bodily injury arising from business operations. Liability coverage offers PEOs another way to safeguard financial reservoirs.
Employment Practices Liability
Unfortunately, employees’ lawsuits against employers are on the rise, and if you want to avoid the financial stress that often accompanies such claims, you may consider employment practices liability insurance. This coverage protects businesses from various claims, such as discrimination and sexual harassment.
When PEOs are adequately insured, they have peace of mind knowing they are protected from many potential unexpected risks.