Professional employer organizations, or PEOs, have unique insurance needs. PEO insurance packages should include appropriate Employee Benefits Liability Insurance. Employee Benefits Liability Insurance protects staffing agencies against claims of errors or omissions of employee benefits.
What Types of Errors and Omissions Are Covered?
Employee Benefits Liability generally covers claims resulting from omissions and errors in:
- Explaining benefit plans and eligibility to employees and their eligible family members
- Enrolling and maintaining employees and their eligible family members in benefit plans
- Maintaining documentation related to employee benefits
In short, Employee Benefits Liability policies provide coverage of staffing agencies in the event of errors or negligence in the administration of employee benefits. Because PEOs often administer benefits on behalf of client companies, these types of errors and omissions can be a significant risk factor.
What Types of Benefits Are Covered?
Employee Benefits Liability coverage includes a broad range of benefits coverage including:
- Life, health and disability insurance
- Retirement plans
- Other benefits offered by employers
Do Staffing Agencies Require a Separate Policy for Employee Benefits Liability?
In many cases, Employee Benefits Liability coverage is included under a general or fiduciary liability policy, but in some cases it’s useful for PEO insurance packages to include a separate policy for Employee Benefits Liability because many PEOs process HR related items, including the administration of benefits.