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By: Dax Kastrin

Owner of Elemental Risk Management

505-933-6511

General Liability Insurance

Property Insurance

Worker's Compensation

Businesses require insurance coverage to operate safely in an environment that is full of risks and unpredictable accidents. Staffing companies, especially, are at high risk of lawsuits as their job involves connecting hundreds of people with companies looking for candidates. Since they operate as the middlemen between workers and employers, they have serious obligations to both parties. So just having workers' compensation coverage won't do it. They need more than one policy to ensure that their business is protected.

So what insurance is needed for staffing companies? Let’s find out below.

What Insurance Is Needed for Staffing Companies?

To avoid being in the midst of a lawsuit, a staffing company must protect itself and its assets by securing the right type of insurance policies. If you have a staffing company, you must get the following types of insurance policies to cover all your bases:

1. Workers Compensation Insurance

Workers' compensation insurance is a type of coverage that offers compensation to employees who have been injured at work. It covers lost wages and medical expenses for the injured employees, as is required by most state laws from staffing agencies.

However, they can be tricky as most state laws can mistake the employees you place in a company as your temporary employees. So you must talk to a reliable insurance provider to understand your state's guidelines. Only then can you have the right insurance policies that comply with your state's legal requirements.

2. General Liability Insurance

General liability insurance is the most important insurance policy that any business can have. It offers coverage against the most common liability issues that occur when running a business. For instance, general liability insurance can cover you for situations like property damage, third-party injuries, and advertising problems, including copyright infringement.

In addition to compensating the affected parties for the losses incurred, general liability insurance also offers coverage for the settlement and legal costs for your business in case the affected parties file a lawsuit against you. So if you have general liability insurance, you won’t have to pay the legal or settlement costs from your own pocket.

3. Professional Liability Insurance

Professional liability insurance is also called errors and omissions insurance. This type of insurance covers businesses if they are accused of negligence or error while delivering their professional services.

In the case of a staffing company, such negligence and errors can occur if their client accuses them of failing to uphold the industry regulations, failing to deliver the required conditions as per a contract within the deadline, or placing an employee that is not the right fit for the job.

In case of such accusations, professional liability insurance covers the business, the business owner, and its employees.

4. Umbrella Utility Insurance

Umbrella utility insurance is a general policy that offers coverage in excess of standard liability limits for general, auto, and employer’s liability policies. It also offers coverage for situations that are not included in your underlying liability policies. It can protect you against property damage, lawsuits, injuries, and some personal liability situations.

An umbrella utility insurance policy protects your business, your assets, and your future by providing coverage when you have exhausted the limits of your auto, general, or professional policies. It also protects you from claims that are excluded from other liability policies.

5. Hired/Non-Owned Auto Liability Insurance

Hired and non-owned auto liability insurance protects the staffing company owner when their employees use their personal vehicles at the job and cause injuries or damages to the third party. It covers all the liability expenses incurred due to accidents caused by employees using their own vehicles for business purposes. In addition to the employees' personal vehicles, this also includes the vehicles that are rented by the business for work.

For instance, if your accountant uses their personal vehicle to deposit your business money in the bank and they are involved in an accident, the medical expenses and any lawsuit expenses made by the third party will be covered by this insurance.

6. Employment Practices Liability Insurance

Employment practices liability insurance offers coverage against lawsuits that government agencies or employees file against the business owner. They protect you against wrongful allegations of harassment, discharge, discrimination, and any other types of wrongdoing.

This is a specialized type of insurance that is designed to protect the owner of a staffing company in case of liability claims of wrongful employment practices. It covers the costs of litigating and settling such cases and exists as gap insurance for the employer. It offers coverage for both the employer as well as the business, in contrast to the directors' and officers' liability insurance, which only protects the employer.

7. Commercial Property Insurance

Commercial property insurance offers financial coverage for the replacement or repair of damaged, stolen, or lost business property. This includes your inventory, furniture, equipment, machinery, and computers.

If you own or rent an office for your staffing company and it is attacked, vandalized, or damaged due to fire, flood, or theft, your commercial property insurance will cover all the losses incurred due to these happenings. Your commercial property insurance covers both your property and the contents inside it.

So any business needs to have commercial property insurance as the costs of repair and replacements can be quite hefty.

Conclusion

As a staffing company owner, it can be pretty intimidating to determine what insurance is needed for such companies. Every business has unique risks, and to ensure that you have protected yourself against these risks, you must take due diligence and talk to a reliable insurance provider.

Elemental Risk Management is a reliable team of experts that offers commercial risk-mitigating solutions to make sure you are ready to face any obstacles that may come your way. Contact them today to get tailored policies for your staffing company.

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