PEOs and Risk Management: A Broker’s Guide to Reducing Client Liability

Quick look: Part of establishing an upward trajectory toward scalable growth involves minimizing compliance risks and optimizing employee safety in the workplace. Though this is a tough area to tackle alone, broker clients can feel safeguarded with the expertise and support of a PEO.

Risk and compliance management is a significant part of maintaining operational stability. For SMBs to scale effectively, it’s essential to avoid setbacks which may stem from compliance issues. However, the complex nature of implementing new regulatory requirements and managing everyday compliance is challenging for small- and medium-sized businesses (SMBs) to keep up with.

To alleviate these time-consuming and costly responsibilities and common pressures, it’s beneficial for brokers to expand their services to include the resources, tools, and experience of a professional employer organization (PEO).

Understanding the risk management role of a PEO partner

Though SMBs look to brokers primarily for benefit guidance, the advisory role is expanding and having a connection with a team of HR experts provides a competitive advantage. As part of a PEO’s comprehensive scope of HR services, SMBs also receive guidance in navigating regulatory changes to keep disruptions under control.

A PEO handles risk management across key areas including workers’ compensation, employment practices liability, and compliance with employment laws. Here’s a closer look at each of these categories and how a PEO partner like ExtensisHR eases the stress and time constraints of SMB leaders with an employer protection plan.

Workers’ compensation risk mitigation

Managing employee safety and workers’ compensation requires a full-time effort. A PEO partner streamlines processes for SMB leaders by facilitating customized safety action plans and educating their employees about best practices.

Also, with today’s distributed workforce, companies must be knowledgeable about multi-state compliance requirements. ExtensisHR helps SMBs navigate differences in the law and offers pay-as-you-go workers’ compensation insurance to cover wage replacement and medical benefits to employees injured on the job as required.

Employment Practices Liability Insurance (EPLI)

A PEO also assists with minimizing risks and protect against losses associated with employment-related claims, such as sexual harassment, wrongful discipline, termination of employment, and more.

Compliance with employment laws

With ever-changing federal, state, and local employment laws, SMBs must stay compliant to avoid penalties and legal actions. A PEO is proactive in alerting companies about new laws and provides ongoing oversight to anticipate what each organization may need. The workforce is constantly in a state of flux and business leaders must effectively adapt to changes in order to succeed.

In addition to these primary areas of risk and compliance management, ExtensisHR also offers coverage options including:

Cyber liability insurance

Cyber threats are a rising concern for companies and many SMB leaders want a secure level of protection if and when they are subject to a data breach.

Cyber liability insurance covers expenses, such as restoration of digital assets, replacing impacted computer systems, etc., to defend against damages resulting from a company’s liability to a third party from a failure in security, data breach, or privacy violation.

Crisis management expense reimbursement

To help protect a company’s reputation, businesses choosing this option receive a certain amount of funds for retaining an independent public relations consultant, media management consultant, investigative or legal firm, and the cost of advertising and public relations media and activities in connection with a crisis.

This reflects part of the supplemental benefits offered, which further extends the value of a broker’s services. However, every SMB is different and certain terms, conditions, and exclusions may apply.

ExtensisHR works closely with each client to tailor services to specific needs, allowing companies to determine the level of coverage most beneficial for them.

Instilling trust in SMB clients

When choosing a PEO partner, proven reliability is a must. Brokers can feel confident entrusting their clients’ best interests to ExtensisHR as it remains in the top 1% of PEOs with the following trifecta of industry credentials:

• CPEO – Established by the Internal Revenue Service (IRS), a certified professional employer organization (CPEO) is a recognition assigned to those upholding the highest regulatory standards set by the U.S. government and the PEO industry’s financial assurance program.
• ESAC – Accreditation through the Employer Services Assurance Corporation (ESAC) protects the payment of wages, payroll taxes, employee benefits, and insurance premiums through surety bonds to keep PEO clients safe.
• CI – The Certification Institute (CI) confirms a PEO meets all industry risk management best practices including creating safe work environments and effectively managing workers’ compensation losses.

Having a dedicated team of HR professionals in place to track and implement compliance regulations is a game changer. It provides SMBs with peace of mind and allows them to focus on other crucial areas of company growth so they can reach new levels of success.

Expanding services as a strategic advantage

PEOs are best known for providing premium benefits at affordable costs for SMBs. However, more and more brokers and business leaders are looking for an all-encompassing HR solution which will align with their goals and drive growth.

By including risk and compliance management, SMBs have what they need to advance while simultaneously keeping their companies protected. And, with ExtensisHR’s exceptional customer service and 25+ years of experience, brokers find they have a significant competitive advantage when growing their book of business.

Extend your offerings, secure your long-standing client relationships, and learn more about how our team can benefit you and your clients with our PEO solution. Contact ExtensisHR today.