As a successful business expands, it inevitably becomes necessary to hire more employees. In addition to increasing complexity in payroll and benefits responsibilities, most companies find themselves grappling with new human resources issues that they may not feel equipped to handle.
Professional employer organizations (PEOs) help companies to streamline operations by providing an outsourcing opportunity for many human resource needs. Specific service areas may include:
- Government compliance management
- Workers’ compensation
- Employee and unemployment benefits
- Payroll and payroll tax administration
- Policies and best practices
- Recruiting and hiring
- Employee performance management
While this partnership benefits both the PEO and its client companies, however, it is important to remember that it can leave both partners open to unique liability risks. PEO insurance plans provide specialized coverage that protects businesses, PEOs, and employees.
One Partnership, Separate Liabilities
Most businesses maintain an insurance policy that can help to cover costs associated with employee actions. However, it is important to realize that a PEO partner may not necessarily fall under the same coverage plan. This means that liability will still be considered separately, and a company may be held liable for the actions of its PEO. Whether you are just considering the move to outsource your businesses human resources administration or you are already partnered with a PEO, maintaining a PEO insurance policy is crucial to protecting your company from unforseen employment liability risks.