Lawsuits and claims can be a costly reality for staffing agencies. From workers’ compensation exposures to professional liability concerns, unforeseen incidents can present financial and operational challenges for your firm.
At Mason-McBride, we understand the importance of evaluating the risks associated with each placement.
With more than a century of experience, our team collaborates with industry partners and insurance carriers to help employment agencies review and explore insurance options, including those for higher-risk or harder-to-place exposures.
Unique Risks Facing Staffing Agencies
When running a staffing agency, there’s more to consider than simply matching candidates with open positions. Each placement carries its own potential for risk, both for your agency and your clients. Consider the following scenarios:
- Mismatched Placements: If an employee is placed in a position for which they're not fully qualified, lacking necessary skills, certifications, or experience, there’s a chance of workplace accidents, damage to valuable equipment, or even harm to others. Such incidents can lead to lawsuits holding your agency responsible for improper placement.
- Reputational Concerns: A poor hiring match can reflect negatively on your agency’s reputation, potentially causing you to lose client trust or face negative publicity.
- Employment Practices Risks: Employment agencies are also exposed to claims related to hiring practices. For example, if a candidate feels they were unfairly denied a position, they may allege discrimination, creating exposures that may require specialized coverage.
Coverage for Modern Staffing Firms
Coverage needs vary depending on company size, job types, and client expectations.
Some key insurances for Staffing Agencies include:
- Employment Practices Liability (EPLI): Can help address allegations involving hiring, termination, or other employment-related decisions.
- Workers Compensation Insurance: Staffing agencies have unique workers’ compensation considerations. This coverage provides benefits to help employees recover from work-related injuries or illnesses. It can also support employees' families if they lose their lives in a workplace accident. Premiums are influenced by factors such as job classification, payroll, and claims history.
- General Liability Insurance: Liability insurance helps protect staffing firms from claims related to bodily injury, property damage, advertising injury, and specific errors or omissions. Legal expenses, such as attorney fees and settlements, may become out-of-pocket costs without this coverage.
- Cyber Liability Insurance: Cyber insurance can help staffing firms respond to data breaches involving personally identifiable information. Many policies also include coverage for extortion, business income loss, and system failures resulting from a cyberattack.
- Professional Liability Insurance: Also known as Errors and Omissions (E&O), professional liability insurance can help protect your staffing agency from consequential loss resulting from negligence claims associated with your professional services.
- Business Property Insurance: Business property insurance covers equipment, signage, inventory, and furniture in the event of a fire, storm, or theft. However, it doesn't cover mass-destruction events like floods and earthquakes.
Why Partner With Mason-McBride?
- Focused Experience: Our team has supported staffing and employment agencies through changing workforce trends and evolving risk landscapes.
- Independent Agency Access: We maintain access to multiple program administrators and national carriers specializing in staffing risks.
- Placement-Focused Approach: We help evaluate contractual exposures, classification strategy, limit adequacy, and coverage structure based on your agency’s growth stage and placement profile.
Get in Touch
To discuss insurance considerations for your staffing, recruiting, or employment agency, contact Mason-McBride today.
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