All you need to do is Not Pay the Liability in Full.

"If I mail the check they will not give me a credit for the amount overpaid.  They want a check for the exact amount."

On the Liability check, reduce it to the amount you intend to pay, now. The rest will wait in Liabilities, to be paid later.

This isn't quite right:"so I don't know what to do.  do I cut them a check, applying correct amount to 'insurance expense' just to get it right with them?"

It isn't Expense, if you already have it accrued in Liability, and you never Use Write Check. You already ran it into Payroll, and you have to Pay it using Pay Liabilities. It isn't your additional expense. It's Cash Flow, not Expense.