As the owner of a temporary staffing firm, your job has been to learn about the specific industries your staffing agency services, with an understanding about exactly which types of people thrive in specific jobs or industries. You must evaluate their skill sets in order to determine if they are capable of performing at a desirable level.
At the bare minimum, you’ll need temporary staffing insurance for a number of concerns, including workers’ compensation coverage – guaranteed cost, large or small deductible; captive; or retrospective, depending on the size of your operation; as well as an employment practices liability policy, general liability, and property & casualty coverage, including crime, auto, bonds, office contents & business income.
You may face many unique exposures
Given the nature of your business, owners and risk managers of temporary staffing agencies must address a number of unique liability exposures that frequently are not covered by standard insurance policies. While an agency retains liability for the actions of its employees, those employees are primarily supervised at off-site locations by the agency’s clients.
This arrangement will often create gaps in coverage that are not always evident without a careful and thorough examination of the policy, something that should be done by a professional knowledgeable in temporary staffing insurance. Often, such gaps are not noticed until an uncovered claim forces you to pay full damages out of your own pocket. There are many scenarios that clearly illustrate this point.
For example, let’s say that a temporary employee is working at your client’s warehouse, and accidentally drops a heavy object that damages someone’s car. General liability policies cover bodily injury and property damage claims that arise during the course of your day-to-day business. This means that the manner in which a policy classifies your business can affect whether coverage is provided.
Frequently, temporary staffing agencies are misclassified as employment agencies, which provide permanent employees to other businesses. This can be a problem for temporary staffing agencies because they remain the employer of any workers they place, making them vicariously liable for the actions of those workers.
Consequently, your general liability policy may not provide coverage for some claims if you are classified as an employment agency. This type of issue could allow your carrier to interpret the placement of temporary employees as being outside the scope of your business as agreed upon under your policy. This could very well leave you to pay for any damages they may cause. It’s important to read all policies under your temporary staffing insurance to ensure that you have the required protection at all times.