PEO insurance is an important component of many insurance plans—but what exactly is it, and why does it matter? Here’s an introduction to PEO coverage, as well as the companies who need it.
A PEO, or professional employer organization, is a special company that partners with other companies to offer HR services. It might help a business manage its employee benefits, regulatory compliance, payroll, or human resources. Contractually, a PEO shares some of an employer’s responsibilities with its client company, in an agreement known as a co-employment arrangement. Many PEOs are also combined with staffing agencies, in order to help a wide variety of businesses.
So what is PEO insurance? This is specialized coverage designed to prevent a PEO from disaster should something go wrong. For example, if a business feels that the PEO has not been living up to the agreement and decides to sue, PEO insurance can help handle expensive court costs and legal fees. If a PEO also operates as a staffing agency, then they’ll need staff insurance as well, in order to help protect their employees.
There are many different insurance plans out there, which can protect both a PEOs operations and the owner’s peace of mind. If you run a PEO, then be sure that you have quality coverage.