Staffing Agencies Must Understand Their Risk
Staffing agencies face unique challenges due to the nature of their business. If youre in the staffing industry, its important to understand the different types of liability you are exposed to and why having insurance is critical to your business’s success. Without staff insurance, you could be in financial risk from multiple directions.
Types of Exposure
There are three primary types of exposure staff insurance may help with. The first type of exposure occurs when the agency:
- is unable to provide staff for their client
- provides an unqualified worker
- doesn’t perform the appropriate level of screening
The second type of exposure is for work performed by a contract worker that results in a mistake and subsequent financial loss for the client. Since the contract worker technically works for the staffing agency, the agency may be liable.
The third type is for professional services provided. Professional services can include managing employee benefits, payroll and workers compensation, or recruiting. The staffing agency may be liable for any mistakes made while providing these services.
Protecting Your Business
As you can see, the risks of providing staff and services to third parties carries a lot of risk. Thats why its so important to make sure you have adequate staff insurance from a provider that understands the unique business needs of the staffing industry.