Start with the client service agreement, order form and country schedule. Read them alongside the local employment contract. Those documents tell you who owes each duty, which employment costs your company must reimburse and what you could recover if the provider fails. Use the matrix to put a specific request to the provider, then have counsel check the agreed wording for the employee and jurisdiction.
1. Liability cap
What it does. The liability cap sets the most you can recover from the EOR if it fails you. Read the actual definition of covered loss, fee base, lookback period, aggregate limit and exclusions. An agreement may limit direct losses or exclude consequential loss.
Example position. One opening position is a cap based on fees paid in the preceding 12 months. Choose the amount after estimating exposure and reviewing exclusions. A hypothetical 10-seat team at USD 599 per employee per month pays USD 71,880 a year. That would be the cap if the agreement uses the preceding 12 months of those fees as its basis. Actual recovery also depends on covered losses, exclusions, aggregation and carve-outs. A single wrongful-termination award in France or a back-contributions order in Brazil can exceed that. Estimate your figure with the EOR cost calculator.
Push for a 12-month cap with carve-outs, so that indemnification obligations, breach of confidentiality, data breaches, gross negligence and willful misconduct sit outside it. For data-protection claims, a separate super-cap of two to three times fees is an example to assess against the potential loss.
Watch for a cap of 3–6 months of fees, an unclear fee base, per-claim limit or aggregate maximum, or a cap with no carve-outs. Without carve-outs, the section 2 indemnities fall under a cap that can be smaller than a single employee’s severance.
2. Indemnification
What it does. The indemnity (“defend, indemnify, and hold harmless”) decides who defends and pays when a third party, such as an employee, a tax office or a labor court, brings a claim. It is why you use an EOR, but paying an EOR fee does not transfer every employment liability, so the contract should specify which claims and costs each party bears.
Example position. Indemnities run in both directions. The EOR covers claims arising from its role as legal employer: payroll errors, missed statutory contributions and misclassification built into its own model. You cover claims arising from your own conduct: dismissal instructions you gave, IP claims against your product and discrimination or harassment by your managers. Vendors also price contractor misclassification protection separately. Oyster Shell is an optional USD 49 per contractor per month add-on to its standard USD 29 monthly contractor product fee. Its published overview describes reimbursement of certain claims or losses up to USD 50,000 per claim and USD 500,000 in aggregate per customer, subject to eligibility, terms and exclusions.
Push for an indemnity addressing defense costs and the actual employment exposures outside the general cap or under an agreed higher cap. Any transfer of fines or penalties, insurance response or recovery requires jurisdiction-specific review of enforceability, fault, causation, exclusions and the final wording.
Watch for a one-way indemnity that protects only the vendor, or an EOR indemnity inside the 12-month fee cap. A third-party employment claim can exceed that cap, and the drafting decides whether you pay the difference.
8. Exit assistance
What it does. The exit clause (“Upon termination, Provider shall…”) sets out what the EOR owes you when you leave: records handed over, continuity letters issued and cooperation with the successor employer so your employees keep unbroken service history.
Example position. Under its published standard terms, Oyster charges no exit fee and returns the deposit, about one month of the hire’s gross salary plus employer costs and fees, within 60 days after all amounts are received or confirmed paid, whichever is later, subject to the applicable documents, offsets and settlement conditions. Those terms do not cap the “transition costs” it can deduct from the deposit. Pebl states on its pricing page that it charges no setup or offboarding service fees (checked 24 September 2026). Confirm notice, severance and other employment liabilities, and any other contractual exit terms, separately. Ask for any continuity-administration charge in the written quote.
Push for a zero exit fee in writing, a list of deliverables (payroll history, employment contracts, leave balances, tax filings) with a 30-day delivery deadline, and continuity letters for every employee. Use the order form to cap any transition costs deducted from your deposit.
Watch for exit assistance “at our then-current professional services rates” with no rate card, undefined deliverables and uncapped deductions from your deposit. The 90-day switching guide covers the full transition process. For help coordinating the move, see our paid EOR switching service.
9. Fees on renewal
What it does. The renewal clause sets your price at the contract anniversary and whether the contract renews automatically. One negotiating position is a cap of CPI or 5%, whichever is lower.
Example position. Check the renewal price, notice and commitment in the actual EOR documents. Oyster publishes an annual-plan example: its help center guarantees that the per-seat price of an annual EOR plan will not rise by more than 5% at renewal. Its standard terms still let it change subscription fees on 30 days’ notice, and its pricing page lists $699 per employee per month and mentions annual discounts without giving a figure or volume tiers.
Push for a cap of CPI or 3–5% in the contract, written notice of the new price 60 days before the anniversary, the right to switch from annual to monthly terms at renewal, and volume discounts that carry into the renewal term.
Watch for silent auto-renewal for a further 12 months with an uncapped price increase, a non-renewal window that closes 90 days before the anniversary, and renewal “at our then-current list price.” With any of these, missing the deadline in month 10 costs you a year of unbudgeted fees.
