Temporary Staffing Agencies are a bit unique when it comes to insurance.  Depending upon your type of staffing agency, workers compensation and/or professional liability are some of your largest expenses and also some of your biggest exposures.  Temporary staffing agencies vary more than most other kinds of businesses.  McCaleb-Metzler has insured those that staff office workers only, those that staff professionals such as lawyers or doctors, those that staff lumber yards, manufacturing, construction, and sawmills, and those that staff all of the above.  We have the resources and expertise to properly advise you on how to insure your staffing agency and protect your investment in it.

Workers Compensation Insurance:
Let's first think about workers compensation since it is an easy one to start with.  Most everyone understands workers comp and the need for it.  Remember that not only does workers comp protect the employee, it also protects your staffing firm from litigation from your employees!  Be sure to obtain workers compensation insurance from a qualified, highly rated insurance company with a program specifically for staffing firms.  McCaleb-Metzler has MANY sources for workers compensation such as Zurich, Chartis (AIG), and Benchmark just to name a few. 

McCaleb-Metzler understands workers compensation and we have the resources to save you money while providing the insurance coverage you need.  If you are in the assigned risk pool in your state, remember that we can move you OUT of the pool at any time with no penalty - no need to wait for your policy to expire.  You will receive a refund from your prior insurance company for the unused portion of your policy.  We usually save clients 10% to 40% by taking them out of the assigned risk pool, and have even reduced some client's workers compensation premiums in half.

Professional Liability Insurance:
Another large area of risk and expense for temporary staffing agencies is professional liability insurance.  Sadly, many agencies we talk to believe that their general liability policy covers them for professional liability as well.  That is simply not true.  Most general liability policies will have a professional liability exclusion. 

Your professional liability exposure will vary depending upon what you staff.  For example, if you staff doctors or paralegals, your professional liability exposure will be higher than if you staff blue collar positions.  However, don't think that just because you staff blue collar that you are exempt.  What if that forklift operator you provided runs into a building, backs into a Lexus, or worse yet runs over someone else?  That could be construed as a professional service you provide and any negligence on your part or your employee's part may be declined under your general liability insurance.  Here is a way I advise you to think about your professional liability:  Think about all the assets of your business (bank accounts, physical assets) following each one of your employees wherever you send them.  The reason I say this is that assets of your company that you have worked so hard to build are what is at risk if your employees cause a professional liability claim.

Below I will paste a Risk Profile from Rough Notes that you may find particularly helpful in understanding your insurance needs:

Description of operations: Employment agencies may offer several different types of employment-related services or they may concentrate on just one industry. Services commonly offered are placing a worker with a permanent position, finding a specific type of worker for a customer company, providing employers with short-term or temporary help, or providing workers with job counseling.

It is very important to make sure that the worker seeking employment, the employment operation, and the customer company seeking the worker understand fully the terms and conditions of the employment arrangement. There needs to be strict contractual definition as to who is obligated and responsible for providing workers compensation coverage, who pays the fee for the employment arrangement, who handles payment to the employee, who accounts for taxes and other mandatory deductions, and who provides miscellaneous employee benefits, if any, such as health insurance or a 401(k) savings plan.

Property exposures are usually light and are made up of office-type hazards. There may be some theft potential, depending on the amount and type of electronic equipment on hand.

Crime exposure comes from Employee Dishonesty. It is important to keep billing and disbursements as separate duties. Regular audits are also important.

Inland marine exposures consist of Computers, Valuable Papers and Records, and Accounts Receivable. Duplicates should be made and kept in an off-site backup facility for easy reproduction following a loss.

Premises liability exposure is moderate due to the number of clients visiting the premises. The waiting area and other places where the client has access must be well lighted with floor covering in good condition. Personal injury liability is a high-potential exposure. The agency must take great care to maintain confidentiality when releasing information regarding workers and employers.

Professional liability exposure is of high concern. The background, training, and licensing of the agency's own employees requires review and evaluation. All procedures must be followed and licenses maintained. Employees must be matched with the needs of clients. Misrepresentation of either party may result in allegations of negligence.

Automobile liability exposure depends on whether or not any transport is involved, such as shuttle for temporary workers or transport to job interviews. The automobile exposure will increase significantly if any transport is offered or if employees use their own vehicles for agency business. Drivers must have appropriate licenses for the exposure. MVRs should be run on a regular basis. Vehicles must be maintained and records kept in a central location.

Workers compensation exposures can be limited to office-type hazards if no employees of the company are leased or rented out. Exposures can increase significantly when workers are leased or rented out as the company has little control over the client’s work premises or hazards. The employment contract should specify whether the company and the client provide workers compensation coverage.

Minimum recommended coverage:

Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers, General Liability, Employee Benefits, Professional, Umbrella, Hired and Nonownership Auto, Workers Compensation

Other coverages to consider:

Forgery, Computer Fraud, Employment Related Practices, Business Automobile Liability and Physical Damage

Reprinted copyrighted material with permission by the Rough Notes Company, Inc.