Is Your Co-Employed Policy Being Evidenced Properly on your Acord 25 Certificate of Liability Insurance (COI)?

PEO COI 101

A Professional Employer Organization (PEO) can secure workers’ compensation coverage for their client companies a number of different ways.  The structure and naming conventions used on each policy are often set by the state in which coverage is afforded.  The NCCI classes these policy types with an Policy Type Code of 1-8.  The attributes of each policy type dictates how coverage for that policy should be evidenced on an Acord 25 Certificate of Liability Insurance (COI).  Not surprisingly, however, many agencies servicing PEO clients, who have limited knowledge of the complex and varying PEO policy structures used to properly insure co-employed employees, often evidence coverage improperly on COIs.

Below is a brief tutorial outlining the 5 most common PEO policy types to help you make sure your COIs are being generated properly.

Common PEO Policy Types:

1. Master Policy
   1. 1^st Named insured is PEO
   2. Policy includes the applicable blanket Alternate Employer Endorsement(s) as required by each state, extending coverage to the client companies of the PEO
   3. Co-employment exists
   4. NCCI Policy Type 8
2. Multiple Coordinated Policy (MCP)
   1. Naming convention is established by the State(s) where coverage is provided and typically includes both the PEO and Client Company as the 1^st named insured
      1. i.e. “PEO Name L/C/F Client Name”
      2. i.e. “PEO Name for workers leased to Client Name”
   2. No alternate employer endorsement is needed as both the PEO and the Client are named as insureds on the policy
   3. Co-employment exists
   4. NCCI Policy Type 4
3. Client Direct Purchase
   1. 1^st Named insured is the Client Company
   2. Policy includes an alternate employer endorsement naming the PEO
   3. Co-employment exists; coverage is also extended to non-leased employees
   4. NCCI Policy Type Code 7
4. Mini-Master Policy
   1. 1^st Named insured is PEO
   2. Policy includes an alternate employer endorsement naming only one client company and its affiliated entities
   3. Co-employment exists
   4. NCCI Policy Type Code 5
5. Alternate Services Offering (ASO)
   1. 1^st Named insured is the Client Company
   2. Policy does not include an alternate employer endorsement and the PEO is not named on the policy
   3. NO co-employment exists
   4. NCCI Policy Type Code 1

Proper COI Structure by PEO Policy Type:

Policy Type	Insured Section of COI	Description of Operations (DOO) section of COI	Notes
Master	Name of PEO as listed on the Policy Dec Page	Client Company being evidenced and effective date when coverage was extended to that Client Company is stated here	DOO should include a disclaimer stating coverage is extended to leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
MCP	Name of PEO and Client Company as listed on the Policy Dec Page	Client Company being evidenced and effective date when coverage was extended to that Client Company is stated here	DOO should include a disclaimer stating coverage is extended to leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
Client Direct	Name of Client Company as listed on the Policy Dec Page	PEO is listed as alternate employer	DOO should include a disclaimer stating coverage is extended to leased and non-leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
Mini-Master	Name of PEO as listed on the Policy Dec Page	Client Company being evidenced and effective date when coverage was extended to that Client Company is stated here	DOO should include a disclaimer stating coverage is extended to leased employees except in monopolistic states and any other coverage details pertinent to evidenced policy
ASO	Name of Client Company as listed on the Policy Dec Page	Nothing specific to co-employment is needed	Nothing specific to co-employment is needed

Speak to an experienced PEO agent to learn more.

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All writers specialize in Professional Employer Organization (PEO) business services such as Workers Compensation, Mergers & Acquisitions, Data Management, Employment Practices Liability (EPLI), Cyber Liability Insurance, Health Insurance, Occupational Accident Insurance, Business Insurance, Client Company, Casualty Insurance, Disability Insurance and more.

To contact a PEO expert, please visit Libertate Insurance Services, LLC and RiskMD.