Your clients rely on your advice and the quality of the workers that you provide.
This is why staffing companies can be sued for fraud and negligence in the performance of their duties. In fact, employment agencies have recently been sued because of:
- Asking medical questions during the application process and then not hiring the applicant based on the information they provided.
- Refusing to refer or place qualified female applicants for employment because of their gender.
- Willfully paying female employees less than men who were doing the same work.
What would you do if you were hit with a liability suit for more than your current insurance covered?
Thankfully here at InsuranceHub, we have experience helping employment agencies that specialize in providing staff for all kinds of industries including accounting, healthcare, technical, secretarial, and construction.
Here at InsuranceHub, we understand the risks of running a staffing agency. You face unique challenges, as you have two types of customers:
- People that need jobs
- Companies that need workers
As you know already, your contract with each of these parties needs to spell everything out so that everyone fully understands the terms and conditions of the employment arrangement.
Types of exposure that temporary agencies need protection from:
Property exposures: Fire is your biggest concern here. Fire sources include electrical wiring and wear or overheating of equipment. Only use licensed electricians to do your wiring so it stays up to local codes. You also may have the potential for theft, depending on the amount and type of electronic equipment in your office.
Crime exposure: Your biggest concern is from employee dishonesty. You should be concerned about your office staff stealing from you as well as the temporary staff stealing from your clients. It is important to do background checks on all workers. Have monitoring procedures been put in place? Keep all records in a secure place to prevent unauthorized access and ID theft. Finally use a different person for each of the following: ordering, billing and disbursing of funds. Remember to perform annual audits of your accounts.
Inland marine exposures consist of computers, accounts receivable for unpaid balances, and valuable papers and records. Keep duplicate copies of all important paperwork off-site in case the originals are destroyed.
Premises liability exposure: Keep your waiting area and other places where clients have access well-lit, and make sure the floor covering is in good condition. Personal injury liability is a high-potential exposure. The agency must take great care to maintain confidentiality when obtaining and releasing information regarding workers and employers.
Professional liability exposure: This can be high. make sure that you are checking and verifying the background, training, and licensing of all of the temporary employees that you are placing. Make sure that all licenses and continuing education credits are being kept up to date. Sending unqualified employees could result in allegations of negligence.
Automobile exposure: Do you transport your temporary workers to their job locations or job interviews? Does your staff use company vehicles to pick up supplies and do errands? Make sure all drivers have the appropriate licenses. Do regular MVR checks to make sure they are driving safely. Finally, maintain all vehicles and keep a copy of all your records.
Workers compensation exposures: Your employees' biggest risks are usually office related. Ergonomically designed workstations and training can usually help to reduce eye strain, neck strain, carpal tunnel syndrome, and repetitive stress injuries. If your employees are leased out to another company, your contract with them needs to spell out who is providing the workers' comp coverage.
Here is the minimum recommended employment agency insurance coverage:
- Business Personal Property
- Employee Dishonesty
- Accounts Receivable
- Valuable Papers and Records
- General Liability
- Employee Benefits
- Hired and Nonownership Auto
- Workers' Compensation
Other employment agency insurance coverage to consider:
- Business Income and Extra Expense
- Computer Fraud
- Employment-related Practices
- Business Automobile Liability and Physical Damage