The staffing industry plays a crucial role in connecting businesses with qualified employees, but it also faces unique risks and liabilities. As a staffing agency owner, it’s essential to understand the various types of insurance available to protect your business. This article will recommend the 5 best providers of staffing agency insurance, provide an overview of key risks and exposures, the types of insurance coverage tailored to staffing agencies, and tips for choosing the right policies.
- 6 best staffing agency insurance companies
- How much does staffing agency insurance cost?
- Key risks and exposures of staffing agencies and types of insurance coverage for staffing agencies
- Factors to consider when choosing staffing agency insurance
- Tips for reducing risks and insurance costs for staffing agencies
6 best staffing agency insurance companies
Many insurance companies offer staffing agency insurance. The temporary staffing industry has its own unique characteristics and is facing a unique set of risks and exposures. After intensive research, here are the top 6 providers of staffing agency insurance that we recommend:
- Simply Business: Best for comparing several quotes from top-tier carriers
- The Hartford: Best for comprehensive staffing agency coverage
- Certainly: Best for good coverage at a reasonable rate, and a great digital experience
- Bankers Insurance: Best for EPLI and workers comp insurance for staffing agencies
- Philadelphia Insurance Companies: Best for staffing agencies in the manufacturing and construction industries
- Tivly: Best brokerage firm if you prefer working with independent and knowledgeable agents
Simply Business: Best for comparing several quotes from top-tier carriers
Simply Business is an excellent choice for staffing agencies looking to compare multiple quotes from top-tier carriers. This platform allows agencies to easily compare insurance policies, ensuring they find the right coverage at the best price. Simply Business offers a wide range of insurance options tailored to the needs of staffing agencies, making it a convenient one-stop-shop for insurance solutions.
- Allows for easy comparison of multiple quotes from top insurance carriers
- Offers a wide range of insurance options specifically for staffing agencies
- Streamlines the insurance purchasing process through a user-friendly platform
- May not offer personalized advice or guidance like a dedicated insurance agent
- Limited control over which carriers are included in the comparison
- Some users may find the online platform less personal than working with an agent directly
The Hartford: Best for comprehensive staffing agency coverage
The Hartford is a well-established insurance provider that offers comprehensive coverage options for staffing agencies. Their tailored insurance policies address the unique risks staffing agencies face, including professional liability, employment practices liability, and workers’ compensation. The Hartford’s extensive industry experience and reputation for excellent customer service make it a reliable choice for staffing agency insurance.
- Offers comprehensive insurance coverage tailored to staffing agencies
- Reputable company with extensive industry experience
- Known for excellent customer service and claims handling
- Premiums may be higher compared to some other insurance providers
- May not offer as many customization options as some competitors
- Online services may not be as advanced as some digitally-focused providers
Certainly: Best for good coverage at a reasonable rate, and a great digital experience
Certainly, a subsidiary of The Hartford, offers staffing agencies good coverage at a reasonable rate and a great digital experience. With a focus on providing a seamless online experience, Certainly makes it easy for staffing agencies to purchase and manage insurance policies. Offering competitive pricing and coverage options tailored to the needs of staffing agencies, Certainly is a strong choice for those seeking a digital-first approach to insurance.
- Competitive pricing for comprehensive staffing agency coverage
- User-friendly digital platform for purchasing and managing policies
- Backed by the financial strength and reputation of The Hartford
- May lack the personal touch of working with a dedicated insurance agent
- Some users may prefer a more traditional insurance purchasing process
- Limited to the coverage options and carriers available through The Hartford
Bankers Insurance: Best for EPLI and workers comp insurance for staffing agencies
Bankers Insurance is a top choice for staffing agencies seeking employment practices liability insurance (EPLI) and workers’ compensation coverage. With expertise in these specific areas, Bankers Insurance can offer tailored policies that address the unique risks staffing agencies face. Their industry knowledge and commitment to excellent customer service make them a reliable option for specialized coverage.
- Specializes in EPLI and workers’ compensation coverage for staffing agencies
- Offers tailored policies to address the unique risks in the staffing industry
- Known for excellent customer service and support
- May not offer a wide range of other insurance products for staffing agencies
- Premiums may be higher for their specialized coverage options
- Online services and tools may not be as advanced as some competitors
Philadelphia Insurance Companies: Best for staffing agencies in the manufacturing and construction industries
Philadelphia Insurance Companies is an ideal choice for staffing agencies operating in the manufacturing and construction industries. Their industry-specific knowledge and tailored coverage options address the unique risks and challenges faced by staffing agencies in these sectors. With a focus on providing comprehensive insurance solutions and excellent customer support, Philadelphia Insurance Companies is a reliable choice for specialized staffing agency insurance.
- Specializes in insurance coverage for staffing agencies in manufacturing and construction
- Offers tailored policies to address the unique risks in these industries
- Known for excellent customer service and support
- May not be the best fit for staffing agencies in other industries
- Premiums may be higher for their specialized coverage options
- Online services and tools may not be as advanced as some competitors
Tivly: Best brokerage firm if you prefer working with independent and knowledgeable agents
Tivly is a top choice for staffing agencies that prefer working with independent and knowledgeable agents. As a brokerage firm, Tivly partners with multiple insurance carriers to provide a wide range of coverage options tailored to the needs of staffing agencies. Their experienced agents offer personalized advice and guidance, ensuring that staffing agencies find the right coverage at competitive rates.
- Works with a variety of insurance carriers to offer tailored coverage options
- Experienced agents provide personalized advice and guidance
- Focus on finding competitive rates for staffing agency insurance
- May not have the same level of digital tools and services as some providers
- Some users may prefer the convenience of an all-in-one platform
- Working with a brokerage firm may add an additional layer to the insurance purchasing process
Factors impacting staffing agency insurance costs
Several factors impact the staffing agency insurance costs. Below are the main ones:
Size of the staffing agency
The size of a staffing agency can significantly impact the cost of insurance. Larger agencies with more employees, clients, and placements typically face greater risks and liabilities, leading to higher insurance premiums. Smaller agencies, with fewer employees and a more limited client base, may have lower insurance costs due to their reduced risk exposure.
Industry and types of placements
The industry in which a staffing agency operates and the types of placements it handles can affect insurance costs. Staffing agencies that place workers in high-risk industries, such as construction or manufacturing, may have higher insurance premiums due to the increased potential for workplace accidents or professional liability claims. Agencies specializing in lower-risk industries, like administrative or IT roles, may experience lower insurance costs.
A staffing agency’s claims history can significantly influence the cost of insurance. Agencies with a history of frequent or severe insurance claims may be considered higher risk by insurance providers, leading to increased premiums. Maintaining a good claims history by implementing robust risk management practices and addressing potential issues proactively can help keep insurance costs down.
The geographic location of a staffing agency can impact insurance costs. Agencies operating in areas with higher costs of living, higher wage levels, or increased litigation risk may face higher insurance premiums. Additionally, state-specific regulations and requirements can also influence the cost of coverage, such as workers’ compensation rates, which vary by state.
Coverage limits and deductibles
The coverage limits and deductibles chosen by a staffing agency will directly affect the cost of insurance. Higher coverage limits provide more extensive protection, but they also come with higher premiums. Similarly, lower deductibles result in higher premiums, while higher deductibles can lower the cost of insurance. It’s essential for staffing agencies to carefully consider their coverage needs and financial resources when selecting limits and deductibles.
Risk management practices
The risk management practices in place at a staffing agency can influence insurance costs. Agencies with robust safety policies, employee training programs, and regular audits to identify and address potential risks may be eligible for discounts on their insurance premiums. By demonstrating a commitment to minimizing risk and preventing claims, staffing agencies can potentially reduce their insurance costs.
How much does staffing agency insurance cost?
Staffing agencies may need several coverage to appropriately protect its operation risks: general liability insurance, profesional liability insurance, workers comp insurance, employment practices liability insurance (EPLI), and cyber liability insurance. Below are the average costs of these coverages for staffing agencies:
|Staffing agency insurance coverages||Average costs|
|General liability insurance||$45 – $144 per month|
|Professional liability insurance||$48 – $128 per month|
|EPLI||$76 – $108 per month|
|Workers comp insurance||$68 – $187 per month|
|Cyber liability insurance||$81 – $138 per month|
Keep in mind that these are just the averages. Your rates will be different. Be sure to shop around with a few companies or work with a top broker like Simply Business, Smart Financial, or Tivly to get and compare several quotes to find the cheapest one for your agency.
Key risks and exposures of staffing agencies and types of insurance coverage for staffing agencies
Staffing agencies are exposed to several risks unique to their operations. Below are the key risks and exposures staffing agencies may have and the types of insurance staffing agencies may need to have:
Professional liability & professional liability insurance
Staffing agencies can face professional liability claims if they place an employee who performs inadequately or causes harm to the client’s business. Misrepresentation of an employee’s qualifications or failure to conduct proper background checks can also lead to liability claims.
For example, a staffing agency places a candidate with a client company to fill a senior accounting role. The candidate’s resume claims they have extensive experience with financial management and reporting. However, it is later discovered that the candidate exaggerated their qualifications, and the client company suffers financial losses due to their inadequate performance. The client may sue the staffing agency for misrepresenting the candidate’s qualifications, leading to a professional liability claim.
Here is another example: A staffing agency specializes in placing healthcare professionals, such as nurses and medical technicians, in hospitals and clinics. The agency is hired by a hospital to find a qualified and experienced nurse to work in their Intensive Care Unit (ICU).
The staffing agency conducts an initial screening of candidates and selects a nurse who appears to have the necessary skills and experience. However, the agency fails to verify the nurse’s credentials thoroughly, and it turns out that the nurse has a history of negligence and malpractice.
While working in the ICU, the nurse makes a critical medication error, administering the wrong dosage of a drug to a patient, which leads to severe complications and the patient’s eventual death. The patient’s family sues the hospital for malpractice, and the hospital, in turn, sues the staffing agency for failing to conduct a proper background check and for placing a nurse with a history of negligence.
In this situation, the staffing agency would face a professional liability claim for the damages incurred by the hospital due to their negligence in the hiring process. This emphasizes the importance of thorough candidate screening and verification, especially when placing healthcare professionals in critical roles, where the potential consequences of errors can be severe.
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects staffing agencies from claims arising from negligence or errors in the services they provide. This coverage is essential for agencies to safeguard against potential financial losses resulting from dissatisfied clients or legal disputes.
Employment practices liability & employment practices liability insurance (EPLI)
Employment practices liability arises from disputes and allegations involving discrimination, harassment, wrongful termination, or other employment-related issues. Staffing agencies are responsible for addressing these issues among both their internal staff and the employees they place.
For example, a temporary worker placed by the staffing agency at a client’s workplace alleges that they experienced racial discrimination by their supervisor, leading to a hostile work environment. The temporary worker files a lawsuit against both the client company and the staffing agency for failing to address the issue. This situation would trigger an employment practices liability claim.
Employment practices liability insurance (EPLI) covers staffing agencies against claims related to employment-related issues, such as discrimination, harassment, wrongful termination, or retaliation. As staffing agencies are responsible for managing both their internal employees and the employees they place, EPLI coverage is crucial to protect against potential lawsuits and financial losses.
Workers’ compensation risks and workers comp insurance
As an employer, staffing agencies are required to provide workers’ compensation coverage for their employees, including temporary and contract workers. This coverage is essential to protect the agency from financial losses resulting from workplace injuries or illnesses.
For example, a contract worker is placed at a manufacturing facility by a staffing agency. While operating heavy machinery, the worker suffers a severe injury, resulting in hospitalization and an extended recovery period. The injured worker files a workers’ compensation claim for medical expenses and wage replacement benefits, and the staffing agency is responsible for covering these costs.
Workers’ compensation insurance is mandatory for most businesses, including staffing agencies. This coverage provides medical and wage benefits for employees who suffer work-related injuries or illnesses, as well as protecting the agency from potential lawsuits related to workplace accidents.
General liability & general liability insurance
General liability covers a broad range of risks, including third-party injuries and property damage occurring on the agency’s premises or as a result of the agency’s operations.
For example, a client visits the staffing agency’s office for a meeting. While in the office, they trip over an exposed power cord, resulting in a serious injury. The client sues the staffing agency for negligence in maintaining a safe environment, leading to a general liability claim.
General liability insurance is crucial for staffing agencies, as it provides coverage for third-party injuries, property damage, and legal defense costs. This coverage helps protect the agency against potential lawsuits and financial losses related to accidents or incidents involving clients, visitors, or employees.
Cyber liability risks and cyber liability insurance
Cyber liability risks for staffing agencies refer to the potential threats and vulnerabilities associated with the handling, storage, and management of sensitive digital information. Staffing agencies typically deal with a considerable amount of personal and financial data, including candidate resumes, client contracts, and employee records. This data can be susceptible to cyberattacks or data breaches, which could have significant consequences for the staffing agency and the affected individuals.
Some of the key cyber liability risks for staffing agencies include:
- Data breaches: Unauthorized access to sensitive information, such as personal identification details, Social Security numbers, or financial data, can lead to identity theft or financial fraud, exposing the staffing agency to potential lawsuits and financial losses.
- Ransomware attacks: Cybercriminals may use ransomware to encrypt the staffing agency’s data, demanding a ransom payment to restore access. This can lead to significant financial losses and operational disruptions.
- Phishing attacks: Cybercriminals may use phishing emails or other social engineering tactics to trick employees into revealing sensitive information or granting access to the agency’s systems.
- Insider threats: Disgruntled or dishonest employees may intentionally leak sensitive information or compromise the agency’s cybersecurity measures, leading to data breaches or other cyber incidents.
- Third-party risks: Staffing agencies often work with various third-party service providers, such as payroll or applicant tracking system vendors. If these third parties experience a data breach or cyberattack, the staffing agency’s data may be at risk.
To manage these risks, staffing agencies should invest in cyber liability insurance, which provides coverage for financial losses and legal expenses related to cyber incidents. Additionally, it’s crucial for staffing agencies to implement robust cybersecurity measures, such as employee training, regular software updates, and strong access controls, to protect their sensitive data and minimize the likelihood of a cyberattack.
Commercial property insurance
Commercial property insurance covers the physical assets of a staffing agency, such as office buildings, equipment, and furnishings. This coverage helps protect the agency from financial losses resulting from events like fires, storms, theft, or vandalism.
Factors to consider when choosing staffing agency insurance
Rates are important to buying insurance for your staffing agency. However, it shouldn’t be everything. Other factors are also important in your critical decision.
Assessing risk exposure
Before purchasing insurance, staffing agencies should carefully assess their risk exposure, considering factors such as the size of their operations, the industries they serve, and the types of employees they place.
Coverage limits and deductibles
Selecting appropriate coverage limits and deductibles is crucial to ensure adequate protection while managing insurance costs. Staffing agencies should evaluate their potential financial exposure in the event of a claim and choose limits and deductibles accordingly.
Legal and contractual requirements
Staffing agencies should be aware of any legal requirements for specific types of insurance, such as workers’ compensation coverage, as well as any contractual obligations with clients or partners that may require specific coverage levels or types.
Customizing coverage to meet agency needs
Each staffing agency is unique, so it’s essential to customize coverage to suit the specific needs of the business. This may involve adding endorsements or riders to standard policies, adjusting coverage limits, or selecting specialized coverage types.
Tips for reducing risks and insurance costs for staffing agencies
If you follow the tips below, you will be able to reduce risks that your staffing agency is exposed to and thus will lower insurance premiums for your agency too.
Implementing robust risk management practices
Proactively managing risks can help reduce the likelihood of claims and potentially lower insurance costs. Implementing safety policies, conducting regular audits, and addressing potential hazards can help minimize risks.
Employee training and education
Providing training and education for both internal staff and the employees placed by the agency can help prevent issues that may lead to insurance claims. This includes safety training, proper use of equipment, and education on workplace policies and procedures.
Regularly reviewing and updating policies and procedures
As a staffing agency grows and evolves, it’s important to regularly review and update policies and procedures to ensure they remain effective and compliant with current laws and regulations. This can help prevent potential claims and maintain appropriate insurance coverage.
Working with an experienced insurance agent or broker
An experienced insurance agent or broker can help staffing agencies navigate the complexities of insurance coverage, provide expert advice, and help secure the best coverage at competitive rates. By working with an insurance professional, staffing agencies can better understand their unique risks and ensure they have the right policies in place.
Staffing agency insurance is crucial to protect businesses from the unique risks and liabilities they face. By understanding the various types of coverage available, assessing risk exposure, and working with an experienced insurance professional, staffing agencies can ensure they have the protection they need to thrive in a competitive and dynamic industry.