A professional liability (errors & omissions) policy protects a staffing firm in the event of legal action relative to allegations of financial loss. Among other causes, the allegations might stem from the placement of contract workers or from the services those workers provide. This type of policy also includes PEO insurance coverage.
A PEO is a Business Partner
A professional employer organization or PEO assists an employer in the business of employment, taking on responsibilities such as management of employee payroll, health insurance, 401(k) plans and workplace risk management. Other responsibilities include proper management of regulatory compliance, paying federal and state taxes and administering workers compensation coverage. PEO insurance provides coverage for these and other services the organization furnishes to its client and for defending any claims that might arise out of the actions or activities of PEO workers.
PEO Insurance is Part of the Whole
Professional liability insurance is designed to protect the staffing industry with regard to the diversity of the businesses served and the workers placed. PEO insurance is part of that design. Given the PEOs exacting work with accounting, human resources and risk management tasks, these policies include a number of effective safeguards. In addition, the insurance covers claims that might be brought anywhere in the world.