Most companies prefer to focus on driving revenue rather than handling administrative tasks like payroll. So, they outsource them. This fact – plus the rise of cloud technology – means payroll services companies like yours are in demand. But this line of work comes with risks, too.
Given that the nature of your job involves dealing with sensitive client information, you can never be too careful. Incorrectly processing employee payments or filing payroll taxes may even lead to a lawsuit against your firm!
Business insurance for payroll services helps companies operate with confidence, knowing their policy will cover general and professional liability claims. Here are three reasons you need it.
One of Your Clients Gets Audited by the IRS
Did you know the IRS "penalizes about one out of every three business owners for payroll errors"? It's your duty as a professional payroll service to minimize mistakes on behalf of your clients. If one of them faces an audit and gets fined; as a result, they'll take you to court.
Situations like these call for errors and omissions insurance, also known as professional liability coverage. According to the Insurance Information Institute, this type of policy covers claims of:
- Inaccurate advice
- Violation of good faith and fair dealing
Professional liability insurance will pay for defense costs in court and judgments against you.
Your Company Suffers a Data Breach
A few years ago, the payroll vendor for Assisted Living Concepts in Chicago experienced a data breach. Over 43,000 employees had their personal information compromised.
Since then, cyberattacks and data breaches have only gotten more advanced. Your company deals with sensitive—read: valuable—information daily. Shore up your cybersecurity practices. Cyber insurance adds another layer of protection by covering the cost of notification, credit monitoring services for victims, and more.
Your Employee Experiences a Repetitive Stress Injury
Part of your job is looking out for your employees. Your staff can experience a variety of musculoskeletal injuries from long hours of sitting and making the same motions every day. Long hours in front of a computer can cause work-related eye strain too.
For example, imagine one of your department managers is diagnosed with carpal tunnel syndrome and requires surgery. Who's financially responsible here? Your, workers' compensation insurance plan covers the cost of their medical fees, lost wages, and more. This plan will take care of your staff, and in effect, your business.
Are you looking for affordable business insurance for payroll services? Use CoverHound to compare quotes for free!