Professional Liability Insurance Covers a PEO

A professional employer organization, or PEO, offers a service an employer can use to outsource certain employee management tasks. These include recruiting, payroll, employee benefits, training and development. The PEO also becomes the employer of record for tax and insurance purposes, a practice known as co-employment. Coverage for PEOs is extended under Professional Liability Insurance (Errors & Omissions).

How Staffing Firms Fit Into the Picture

Staffing firms recruit employees for specific positions that need to be filled within their client companies. In a PEO arrangement, the PEO then assumes employer responsibility for the taxes, benefit plans and other human resources programs for these employees. PEO insurance provides coverage for the services they render to the clients and for defending claims that arise out of the actions or activities of PEO workers.

Coverage Begins With Staffing Firm Protection

The professional liability policy protects the recruiting agency from allegations of financial loss relative to the placement of contract workers and the services they provide. Both blue- and white-collar workers are covered. Included are professionals such as engineers, architects, accountants, attorneys and IT experts. PEO insurance is designed with the diversity of the staffing industry in mind and includes coverage for temporary employees. Coverage is also available for claims brought anywhere in the world.