Payroll Service Insurance

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Professional mistakes are by far the biggest risk payroll service providers are exposed to, which can become grounds for hefty lawsuits and claims. And while payroll service providers can do a lot to minimize such mistakes - they will eventually happen.

And the best way to protect your business and its financial standing in case of a lawsuit or a claim against your business is by taking out an adequate level of cover.

How Much Does Payroll Service Insurance Cost?

There are many different factors that play a role when determining the cost of your payroll service insurance. Typically - the two biggest factors are the level of cover you are after and the size of your payroll service business. The bigger the business and the bigger the cover - the more expensive your insurance will be.

The average payroll service provider in the U.S. pays around $220 per month or around $2,640 per year on professional liability insurance. This is the most important insurance for payroll service businesses as most of their lawsuits and claims will come as a result of professional mistakes.

Another great policy to have is general liability insurance. This will cost your business significantly less - at around $35 per month or $420 per year. This insurance will provide your business with cover in case of third party bodily injuries and property damage.

Payroll service providers must keep their clients' information safe at all times, and if there is a data breach - the payroll service provider can get sued for a lot of money. That’s why cyber liability insurance is necessary. It will cost your company around $100 per month or $1,200 per year.

If your business employs any staff - worker’s compensation insurance is necessary. This policy will cost you around $40 every month or around $480 per year. It essentially covers your staff’s financial liabilities if they get injured or sick as their place of work. From lost wages to medical and hospital bills - this policy covers it all.

What Types of Insurance Do Payroll Services Need?

Payroll service providers can benefit from various different insurance policies. The level of cover your specific payroll service needs will depend on the state your business operates out of, the type of clients you deal with, the number of staff your business employs, the size of your business, and other similar factors.

Please continue reading to find out the best insurance policies for payroll services:

Why Do Payroll Services Need Insurance?

Payroll service providers act on behalf of companies and organizations and take care of all of their payroll needs for them. And as such, a great deal of responsibility is handed over to businesses responsible for taking care of the payroll of a company.

And as such - a single or a number of mistakes made by the payroll services can cost their client a lot of money, which can put the payroll service provider in a lot of financial and legal trouble.

The best way payroll service providers can protect themselves from claims and lawsuits related to professional mistakes is by being covered with an insurance policy. That way, if a mistake were to happen, which ends up getting the payroll service provider sued - they will be freed from any financial liabilities as the insurance company will step in and take care of the costs related to the claim or the lawsuit.

In some states - state law requires payroll service providers to have at least a certain level of insurance coverage before they are allowed to legally trade and provide their services.

Either way - getting your payroll services business insured is a great idea as you never know when a lawsuit or a claim might be taken against your company.

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