Do You Need PEO Insurance?

Liability Insurance

Professional employer organizations (PEOs) provide a number of services for businesses who may not have the resources to perform these tasks in-house. While the most common example of a PEO works as a staffing company, other departments are also outsourced to PEOs. This can include payroll services, human resources, employee benefits, and more.

Regardless of what type of PEO you are involved with they all have one thing in common – the need for PEO professional liability insurance.

How Are PEOs at Risk?

As found on, PEOs face exposure risk in three main categories.

  • Placement Exposure. This can involve all aspects of placing the wrong employee to a contracting client, including inadequate testing or screening.
  • Services Provided. This encompasses any services that are provided beyond the scope of performing a task, such as consulting or IT services.
  • Work Performed. Any action of an employee during work performed that results in a financial loss for the contracting company.

What Does PEO Professional Liability Insurance Cover?

Professional liability insurance helps protect you if a client sues you for negligence or other harms caused by the work provided by your agency. These policies can provide coverage for:

  • Errors – real or alleged
  • Negligence
  • Misleading statements
  • Omissions
  • Breach of duty or contract
  • Claims against the performance of professional services

It’s important for PEOs to secure adequate insurance to ensure that their business assets are protected. Without the right insurance, your entire company could be at risk.

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