Insurance Coverage for Temporary Staffing Companies

Workers' compensation is one of the most important insurance coverages for temporary staffing agencies. It provides benefits to employees who suffer work-related injuries or illnesses, including medical expenses, rehabilitation costs, and lost wages as provided by applicable state law.

• Covers qualifying workplace injuries and occupational illnesses
• Provides medical and wage replacement benefits for injured employees
• Can include employers' liability coverage for certain employee injury lawsuits
• Premiums based on employee classifications, payroll, and other rating factors
• May require Alternate Employer Endorsements depending on client contracts

Commercial General Liability (CGL) insurance helps protect a staffing agency against certain third-party claims involving bodily injury, property damage, and personal or advertising injury.

• Third-party bodily injury claims
• Third-party property damage claims
• Certain personal and advertising injury claims
• Legal defense costs for covered claims
• Additional insured coverage when available and required by contract

Professional Liability Insurance, also called Errors & Omissions (E&O), addresses certain claims arising from professional mistakes, negligence, or failures in the services a staffing agency provides.

• Negligent hiring, screening, or placement allegations
• Errors in employee qualifications or credentials
• Failure to provide services as required by a staffing agreement
• Certain financial losses arising from professional mistakes
• Claims involving the professional services provided by the staffing agency

Staffing agencies employ individuals who work under the supervision of other businesses. This creates employment-related exposures involving both the staffing agency and its clients.

• Wrongful termination
• Discrimination
• Sexual harassment
• Retaliation
• Certain other employment-related allegations

Staffing agencies frequently place employees in positions where they have access to client property, inventory, equipment, money, or sensitive information. Crime insurance can help protect against certain financial losses resulting from theft, fraud, or dishonest acts.

• Employee theft and dishonesty
• Theft of money or securities
• Forgery or alteration
• Computer or funds transfer fraud
• Theft of client property by temporary employees when third-party coverage is included

Staffing agencies collect and maintain significant amounts of sensitive information, including employee Social Security numbers, payroll details, banking information, employment applications, and client records.

• Data breaches involving employee or client information
• Ransomware and cyber extortion incidents
• Cyber-related business interruption
• Data recovery and incident response expenses
• Notification and credit monitoring expenses

Property and Contents Insurance helps protect a staffing agency's physical office space, furniture, computers, equipment, and other business-owned property against covered losses.

• Building coverage for agency-owned office space
• Business personal property: furniture, computers, equipment
• Fire and theft protection
• Business interruption coverage
• Equipment breakdown coverage

Staffing agencies may face automobile liability exposures even when they do not own company vehicles. Employees may drive personal vehicles for business purposes, recruiters may travel to client locations, or agencies may provide transportation for assigned workers.

• Commercial auto liability for agency-owned vehicles
• Hired auto liability for rented or leased vehicles
• Non-owned auto liability for employee-owned vehicles used for business
• Physical damage coverage for eligible company vehicles

Umbrella and Excess Liability policies provide additional liability limits above certain underlying insurance policies. Staffing agencies often work with larger commercial clients that require higher insurance limits as part of their contracts.

• Additional limits above general liability
• Additional limits above commercial auto liability
• Additional limits above employers' liability
• Other qualifying liability policies, subject to policy terms

Depending on the size and structure of a staffing operation, employee benefits and Affordable Care Act (ACA) requirements may create additional responsibilities. Because staffing agencies often have fluctuating employee counts and assignments, benefits administration can be especially complex.

• Group health insurance options
• Employee benefits programs
• ACA employer reporting and compliance obligations
• Employee benefits liability coverage for administrative errors
• Fiduciary liability coverage for eligible benefit plan responsibilities