Sec. 4. (a) Except as expressly provided by the professional employer agreement:

(1) a client:

(A) is solely responsible for:

(i) the quality, adequacy, or safety of goods or services produced or sold in the client's business;

(ii) directing, supervising, training, and controlling the work of a covered employee with respect to the business activities of the client; and

(iii) the acts, errors, or omissions of a covered employee with respect to activities described in item (ii); and

(B) is not liable for the acts, errors, or omissions of:

(i) the PEO; or

(ii) a covered employee of the client and a PEO when the covered employee is acting under the express direction and control of the PEO.

(2) A PEO is not liable for the acts, errors, or omissions of a client or a covered employee of the client when the covered employee is acting under the express direction and control of the client.

(3) A covered employee is not, solely as the result of being a covered employee of a PEO, an employee of the PEO for purposes of:

(A) general liability insurance;

(B) fidelity bonds;

(C) surety bonds;

(D) employer's liability that is not covered by worker's compensation; or

(E) liquor liability insurance;

carried by the PEO unless the covered employee is specified as an employee of the PEO by specific reference in the professional employer agreement and any applicable prearranged employment contract, insurance contract, or bond.

(b) This section does not limit:

(1) a contractual liability or obligation specified in a professional employer agreement; or

(2) the liabilities and obligations of a PEO or client as specified in this article.

As added by P.L.245-2005, SEC.7.