Temporary staffing agencies are unique when it comes to insurance. After all, they hire people on a part-time basis, often to fill in for regular full-time employees, with no expectations of being hired permanently. Depending upon the type of staffing agency, professional liability will perhaps be one of your largest expenses and also could lead to some of your biggest exposures. This is because of the model of most staffing agencies, as they vary more than most other kinds of businesses.
Some temp businesses only staff office workers, there are those that staff professionals such as lawyers or doctors, while others may focus on manufacturing, construction, and other labor intensive fields. Then there are staffing agencies that do direct placements, permanent hires, try-before-you-buy programs, PEO’s, Payroll Services, etcetera. The one common ground that they share is a need for some form of temporary staffing insurance to properly insure the staffing agency and help protect their investment.
Arguably, a big area of risk and expense for any temporary staffing agency is professional liability insurance. Many agencies may falsely believe that their general liability policy covers them for professional liability as well, which simply isn’t true. In fact, most general liability policies will explicitly have a professional liability exclusion.
Your professional liability exposure will vary depending upon what type of businesses you staff. For example, if you staff doctors and medical professionals, your exposure will be much higher than if you staff workers in blue-collar positions. However, if a forklift operator provided by your agency destroys a car or runs into a building, this could be construed as negligence on your part (or your employee’s part) and will likely be declined under any general liability insurance claim hence, you should seriously think about your own professional liability issues.
Temporary staffing insurance, and particularly employee liability coverage helps protect all the assets of your business (bank accounts, physical assets) and follows your employees wherever you send them. The assets of your company that you’ve worked so hard to build could be at risk if any one of your employees causes a liability claim. Speak to an agent about any coverage concerns.