Temporary staffing agencies provide valuable and unique services, as they work with and connect employers to employees. This service also comes with unique liabilities so it may seem difficult and confusing to know where to start in buying insurance for your staffing business. Thankfully, insurance for California temporary staffing agencies is less confusing than it seems. Let’s discuss what risks you should be protected against and what insurance policies can help!
Third-Party Risks: General Liability
Like any other business, staffing agencies face the risk of third-party injuries and property damage. Third parties are anyone who is not an employee or owner of your business and can include an applicant or client. California general liability insurance can protect against these types of risks and is commonly the first policy businesses sign up for because of its vital coverage. General liability can also cover lawsuits/legal fees and/or medical costs related to:
- Third-party injuries in your office
- Third-party property damage
- Advertising damages (such as using a copyrighted a photo or slogan on your website without permission)
- Most liabilities arising for the work and services you provide
Since these lawsuits can be potentially detrimental to your business, a general liability quote is deemed essential to provide full insurance coverage for any business, including staffing agencies.
Risk of an Employee Accident: Workers Comp
The state of California requires that all business owners with employees carry workers comp insurance and temporary staffing agencies are no exception. This is valuable coverage as it helps with medical costs and lawsuits related to employee injuries while on the job. However, those considered employees under workers comp for staffing agencies, specifically, are different than other types of businesses since staffing agencies work with both employees and employers. It varies by state but in California, an applicant that you place in a job is still considered your employee. This means that if they get injured while on the job you placed them in, it will be covered by your workers comp coverage as opposed to your client’s workers comp that they are working directly for. Make sure to discuss this with your insurance agent to fully understand your workers comp quote and its coverages for your staffing agency.
Risk of Mistakes: Professional Liability (Generally Included with General Liability Policy)
Certain industries perform a professional service where there clients can trust that they are trained and knowledgeable in their respective fields and staffing agencies fit this category. With that comes the risk of making a mistake in their service which is where a professional liability quote can help. For example, a client may sue you for placing an employee with them that did not qualify and caused a financial loss to the business as a result. Professional liability, also known as Errors & Omissions insurance, can protect against lawsuits related to:
- Misplacing an applicant
- Not complying with industry regulations that you are supposed to know and comply with
- Not fulfilling your side of a contract mutually agreed upon by you and a client
- And much more
It is important to note that professional liability covers mistakes made by you as well as your employees so you can feel confident in your team to know that you have protection against the inevitable, human error.
Risk of Perils and Inconvenience: Business Owners Policy
Staffing agency owners, like other business owners, have the option of purchasing a business owners policy (BOP) which is a type of commercial package policy that combines general liability coverage with commercial property coverage. A BOP quote provides convenience of having two common types of insurance under one policy and often includes more affordable rates through various discounts. The commercial property section covers:
- Your office building (if you own it)
- Business personal property that is damaged by fire, windstorms, vandalism, and/or theft
Business personal property includes property not attached to your office building such as equipment, supplies, furniture etc. making BOP insurance an affordable and convenient option for well-rounded coverage.
Risk of being Uninsured: Call a Reputable Insurance Agent Today!
Temporary staffing agencies face many liabilities, including universal as well as industry-specific risks. However, the proper insurance coverage can easily provide the necessary protection for these risks and more. Talk to a knowledgeable insurance agent who specializes in staffing agency insurance to get started on your business insurance quotes so you can have the strong and unique protection that your staffing agency needs!