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A staffing agency is a business that supplies employees to other businesses.
Staffing agencies have three types of insurance coverage:
1) Loss Prevention Insurance, which covers the risk of worker theft and injury; 2) Employee Benefit Liability Coverage, which protects an employer from any liability or income loss connected with its workers’ claims for medical benefits; 3) Workers Compensation Insurance, which provides protection in case one of their workers gets injured on the job.
The “insurance for staffing agencies” is a type of insurance that covers the cost of injuries to employees. It also protects companies from lawsuits and provides coverage for their staff members.
A series of commercial policies that staffing agency owners may obtain to safeguard their assets is known as staffing agency insurance. Each insurance pays for the expenses connected with the many hazards that numerous employment agencies encounter. Most agencies need Insurance for General Liability, which costs $400 to $1,000 per year and covers third-party injuries and property damage.
Because the cost of insurance for a staffing agency may vary significantly, owners frequently benefit from evaluating quotes from various companies. CoverWallet simplifies this process by providing a single application that most owners can complete in within five minutes to get rates from numerous insurers.
Go to CoverWallet.com.
The Workings of Staffing Insurance
Depending on their business activities, staffing firms face a variety of hazards. As a result, each agency owner must choose the right personnel insurance policy for their company. Individuals’ compensation insurance is required in most states for onsite employees, but temp staffing companies also need coverage for the workers they put with customers.
General liability and Property Insurance for Businesses are required for all sorts of staffing services. Staffing agency owners may frequently receive these coverages under a business owner’s policy (BOP) for less than they’d pay for separate policies due to their minimal risk of third-party claims and significant property damage. BOPs for staffing agencies typically range from $500 to $1,500 per year.
Costs of Staffing Agency Insurance
Costs of Staffing Agency Insurance depend in part on the number of policies and the amount of coverage selected. Another important factor is the industries they serve. Temp agencies that supply workers in manufacturing or construction will most likely pay more for their general liability and workers’ comp than an agency that only places clerical workers.
Costs of Staffing Agency Insurance & Deductibles by Insurance Type
*A deductible is not normally required for Insurance for General Liability, although company owners may request one to minimize their prices.
Policies, coverage amounts, and industries aren’t the only things insurers look at when calculating Costs of Staffing Agency Insurance. Other business characteristics and policy selection also come into play.
Other considerations that insurers take into account when deciding premiums include:
- Deductibles: A deductible is the portion of a claim that the policyholder is liable for. A cheaper premium is frequently associated with a bigger deductible.
- Multiple claims in a short period of time may make a company seem riskier to an insurer, therefore premiums will normally rise as a result.
- Revenue: Insurers frequently charge higher premiums to staffing firms with larger revenue since such firms are more likely to face costly litigation.
- Employees: Having more employees brings a higher danger of employee theft and injury, as well as more potential for negative customer encounters. As a consequence, premiums for workers’ compensation, general liability, and commercial crime are often higher for bigger businesses.
Costs of Workers’ Compensation Insurance for Staffing Firms
Workers’ compensation insurance is required by almost every employment firm for its office employees. Except for Texas, all states require insurance to cover medical expenses and lost earnings for injured workers. Temporary staffing companies, on the other hand, need coverage for employees put in other firms, which raises the total cost of staffing insurance.
The cost of workers’ compensation insurance for staffing firms is determined by the employment risk of each employee, the agency’s payroll, and the agency’s claims history. As a consequence, companies in high-risk occupations often pay more for workers’ compensation. For example, residential construction workers’ compensation expenses often vary from $2.82 to $35.95 per $100 of payroll, but clerical workers’ compensation costs typically range from 8 cents to $1.48 per $100 of payroll.
Tip: Safety training may assist keep your personnel safe while also cutting the cost of your staffing insurance and minimizing workers’ compensation claims. Temp workers are still considered staffing agency employees, even if they are placed with other firms. As a consequence, the owner of the agency is liable for their safety.
Insurance Options for Staffing Firms
Because staffing firms encounter risks, they need insurance to safeguard their assets in the event of litigation or accidents. General liability, commercial property, and workers’ compensation insurance cover their most typical staffing agency risks. Other personnel insurance plans, on the additional hand, may be required by agencies to cover other risks such as negligence charges and employee criminality.
Staffing Insurance Policies: The Most Common Types
Insurance for General Liability
Insurance for General Liability protects staffing agencies by paying the costs associated with third-party claims of property damage, physical injury, and advertising injuries like defamation. If your business faces one of these accusations, general liability typically covers the injured party’s medical or repair bills or your legal fees if they decide to sue.
The following are some instances of general liability claims:
- When your employee is on a temporary assignment, a customer accuses them of breaking their copier.
- In your reception area, a delivery guy falls over an electrical cable.
- A rival files a defamation lawsuit against you because of a tweet published by your social media manager.
These claims are often covered by standard general liability insurance, regardless of whether they are caused by your or your employees’ activities. Because the personnel they put in other firms are agency employees, temporary staffing agencies’ general liability coverage applies to them.
Property Insurance for Businesses
Property Insurance for Businesses pays for repairs to agency-owned property when it’s damaged by fire, theft, vandalism, or other covered perils. Policies cover your agency’s physical space, office equipment, furniture, and fixtures up to the coverage limit, minus your deductible. Agency owners who rent can opt for Property Insurance for Businesses that covers only their offices’ contents.
Property risks in staffing companies are generally low. Most agencies are eligible for a BOP because of this, as well as their minimal risk of general liability litigation.
Insurance for Workers’ Compensation
Most states require Insurance for Workers’ Compensation for staffing companies to cover employees’ medical bills and lost wages if they suffer work-related illnesses or injuries. Depending on state law, business owners are required to purchase coverage or buy it from a state fund when they hire staff. Some states require coverage for even one employee.
Staffing agencies that place workers in permanent positions only have to get Insurance for Workers’ Compensation for their in-house employees. Temporary staffing agencies need coverage for both in-house employees and workers they place with clients.
Because they are paid by the hour, have little influence over their work circumstances, and get benefits, agency-paid temporary employees fail the IRS criteria for independent contractors.
Insurance against commercial crime
Insurance against commercial crime covers financial and property losses due to illegal activities, such as forgery, computer fraud, and theft, whether an outside actor or an employee commits them. Most policies cover the funds and property of the policyholder, so temporary staffing agencies need an endorsement for items owned by clients.
The following are examples of situations that may necessitate the purchase of crime insurance:
- A temporary employee has been charged with stealing items from a retail customer.
- Check fraud is being perpetrated by your bookkeeper.
- A thief taking money from your company
Commercial property policies typically exclude coverage for stolen money or securities, and they also don’t cover employee dishonesty. This makes Insurance against commercial crime an important policy for any business, but especially for temporary staffing agencies.
Insurance for Professional Liability
Insurance for Professional Liability, also known as errors and omissions (E&O) insurance, protects your staffing agency in lawsuits over your professional services. For example, if a client accuses you of sending an underqualified candidate, who then makes errors that cost the client money, Insurance for Professional Liability pays for your legal fees.
Other examples of claims typically covered by Insurance for Professional Liability include:
- Errors: Sending a candidate to the incorrect interview, which costs them a job.
- Failure to do background checks is an example of an omission.
- Making false assertions about a worker’s credentials in order to gain them a job.
For staffing companies, several insurers bundle professional and general liability coverage in a single policy. This may be a cost-cutting measure, but owners should consult with an agent to verify that the coverage is enough.
Additional Insurance Policies for Staffing Agencies
The five insurance plans for staffing firms mentioned above are the most common. Many business owners, on the other hand, operate operations or supply personnel in fields that need supplementary insurance.
Insurance for Cyber Liability, business vehicle insurance, and computers and media coverage are just a few examples of additional personnel insurance products that agency owners may require.
Insurance for Cyber Liability
Insurance for Cyber Liability covers costs associated with data breaches and cyberattacks, such as client notification, credit monitoring, and legal fees. Most agencies have some cyber liability exposures, if only because any employee can accidentally respond to a phishing email. However, information technology (IT) staffing agencies may have the greatest concern.
Insurance for Commercial Vehicles
Staffing agencies with business-owned cars most likely need Insurance for Commercial Vehicles. Most states require business owners to have at least a minimum amount of liability coverage in case they cause damage and injuries to other people, but owners can also buy coverage that pays for their damages and injuries. They can also get hired and nonowned auto liability insurance for the vehicles they hire, rent or borrow for business.
Computers & Media Coverage
When your agency’s computers or network are harmed by specific risks, such as theft, vandalism, or virus, computers and media coverage, also known as electronic data processing coverage, helps pay to recover or replace lost digital data. Some plans also cover software and hardware repairs. These products are only covered to a limited extent by commercial property.
Insurance Providers for Staffing Agencies
Obtaining insurance for a staffing agency may be tricky, particularly for businesses that place temporary employees since they want coverage in numerous locations. As a consequence, agency owners are often need to seek out speciality insurers or engage with brokers that have access to several carriers in order to get coverage.
Top Insurance Providers for Staffing Agencies
The following are some of the leading insurance providers for staffing firms:
CoverWallet
CoverWallet is an online broker that specializes in small company insurance for a variety of sectors, including job placement. To assist small companies in finding the right coverage for their operations, the organization works with top-rated business insurance providers such as CNA, Chubb, and Liberty Mutual.
When it comes to comparative shopping, agency owners could apply for staffing insurance with CoverWallet. By providing a single application that connects your company information to all available carriers, CoverWallet makes it simple to acquire numerous quotations from reliable insurers. It takes less than five minutes to complete the application, and it often returns numerous quotations.
Insurance for Bankers
Insurance for Bankers is a full-service independent insurance agency that can get temporary staffing agencies coverage. In addition to offering quotes from multiple carriers, Insurance for Bankers agents can often negotiate better prices for their clients.
One of Insurance for Bankers’s most unique offerings is the option to combine general and professional liability coverage into a single policy. This streamlines administration and makes Insurance for Bankers ideal for agency owners who want to deal with one insurer, premium, and policy for these two essential coverages.
Insurance Companies in Philadelphia
Insurance Companies in Philadelphia, or PHLY, is a financially sound national carrier that has been developing insurance products for niche markets for more than 55 years. Its experience with hard-to-insure businesses has led them to create a flexible package for temporary staffing agencies.
The general liability limits under PHLY’s temporary employment agency insurance program are significant, with up to $3 million in coverage during the policy period. PHLY, on the other hand, should be considered by company owners that need employment practices liability coverage. Workers matched with clients are immediately covered under the policy, and the insured may choose to utilize their own counsel or the carrier’s.
AP Intego
AP Intego is an online insurance agency that offers a complete lineup of business insurance policies, but their bread and butter is Insurance for Workers’ Compensation. It has a workers’ comp pay-as-you-go plan that bases your premium on your actual monthly payroll rather than an estimate for the year.
The payment plan offered by AP Intego makes it an excellent choice for staffing agency owners who wish to pay precise monthly premiums and avoid surprise expenditures when it comes time for their workers’ compensation audit. The company’s technology works in tandem with your payroll provider to calculate the proper premium and remove payments automatically.
Specialty Programs Around the World
Specialty Programs Around the World is an insurance company that focuses solely on the staffing industry and can offer customized solutions for all types of staffing agencies. The company coverage comes from Zurich, a leader with more than 140 years of experience creating insurance programs for niche industries.
Agency owners might consider working with Specialty Programs Around the World for the company’s depth of experience, but an even bigger draw is the potential discounts the company makes available through partner organizations. Members of the American Staffing Association can get premium discounts, and any World Wide EPLI policyholder receives free consultation time with the law firm Jackson Lewis, LLP.
Getting Staffing Agency Insurance: Some Pointers
Obtaining staffing agency insurance is critical for the profitability of your company, but it’s seldom as easy as choosing coverage and paying your payment. There are a few steps you can take to ensure you’re getting good coverage at a reasonable price.
Work with a seasoned agent who is well-versed in the field.
Insurance agents that are familiar with the staffing sector should be consulted by agency owners. Staffing agencies confront a unique set of hazards in general, but some may face extra risks due to their specialized activities. An insurance professional with expertise in the field can more quickly detect these risks and propose the right staffing insurance to safeguard your company.
Obtain quotes from a variety of carriers.
After wages, insurance is generally the second greatest overhead expense for employment firms. This necessitates agency owners finding reasonable coverage that also completely covers their company, and the best way to do so is by comparing several offers. An insurance broker can assist you not only in obtaining a fair insurance quote, but also in navigating the differences between your insurance alternatives.
Correctly classify your staffing firm
In many cases, the phrases “staffing agency” and “employment agency” are interchangeable. Employment agencies, on the other hand, create permanent positions for insurance. This difference is critical to establish on your application since misclassification may have an effect on coverage for personnel you hire on a contract basis.
Conclusion
Staffing firms exist in many shapes and sizes, and they work in practically every sector. As a result, getting the correct insurance, payroll service, and finance for staffing firms is difficult. To guarantee they acquire the coverage they need for their specific operations, agency owners should evaluate their risks and engage with insurance specialists who understand the sector. A qualified insurance agent may also help owners reduce their total insurance costs by assisting them in identifying best practices and implementing safety measures as needed.
Staffing Agency Insurance is a type of insurance that protects your business from any financial loss if an employee becomes sick, injured or dies. The application process is simple and can be completed online in minutes. Reference: staffing agency insurance application.
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