Staffing Insurance Package Policy

What Is a Staffing Insurance Package Policy?

A Staffing Insurance Package Policy brings together two important types of liability protection:

Coverage depends on the specific insurance carrier, policy form, endorsements, and underwriting requirements.

General Liability Insurance helps protect a temporary staffing agency from certain claims involving third-party bodily injury or property damage arising from covered business operations. Staffing agencies face liability exposures both at their own offices and potentially through the activities of temporary employees working at client locations.

What General Liability May Cover

• Bodily Injury: Claims involving injuries to third parties arising from covered business operations.
• Property Damage: Claims involving accidental damage to another person's property when covered by the policy.
• Premises Liability: Injuries or property damage occurring at the staffing agency's office or other covered business locations.
• Personal & Advertising Injury: Certain claims involving libel, slander, or other covered personal and advertising injuries.
• Legal Defense: Attorney fees and defense expenses associated with covered liability claims.
• Additional Insured Coverage: Certain contractual requirements to extend insured status to clients when available through the policy.

General Liability Exposures for Staffing Agencies

Consider a staffing agency that places temporary employees at a manufacturing facility. A temporary employee accidentally damages equipment belonging to the client or causes an injury to another person. Depending on the circumstances, the staffing agency could be named in a liability claim. Whether that claim is covered depends on the wording of the general liability policy, including exclusions involving temporary employees, professional services, and property in the insured's care, custody, or control.

Professional Liability Insurance, commonly called Errors & Omissions (E&O), helps protect staffing agencies against certain claims involving mistakes, negligence, or failures in providing professional staffing services. Staffing agencies have responsibilities beyond simply supplying employees. They may recruit, screen, evaluate qualifications, verify credentials, and place workers based on a client's requirements. Errors in these services can create liability even when no physical injury or property damage occurs.

What Professional Liability May Cover

• Negligent Hiring or Placement: Allegations that the agency failed to exercise appropriate care in selecting or placing a temporary employee.
• Screening Errors: Certain mistakes involving applicant qualifications, background screening, or employment verification.
• Failure to Perform Staffing Services: Claims alleging the agency failed to deliver staffing services according to its professional obligations.
• Employee Qualification Errors: Allegations involving inaccurate qualifications, certifications, or experience.
• Professional Negligence: Certain financial losses resulting from negligent acts, errors, or omissions in covered staffing services.
• Legal Defense Costs: Defense expenses arising from covered professional liability allegations.

Professional Liability Exposures for Staffing Agencies

For example, a staffing agency places an employee in a position requiring specific qualifications. The client later alleges that the employee was not properly qualified and that the placement resulted in a financial loss. The staffing agency could face a claim alleging negligent screening or placement. Professional Liability Insurance may help address claims of this nature, subject to the policy's definitions, conditions, and exclusions.

Why Combine General Liability and E&O Coverage?

General Liability and Professional Liability address different types of exposures. A staffing company may experience a claim involving physical injury or property damage, while another claim may involve financial loss resulting from an alleged professional mistake. Having both coverages within a staffing-focused insurance program can provide a broader approach to liability protection.

These policies are complementary, not interchangeable. Each coverage has its own terms, exclusions, and conditions.

The Importance of Staffing Agreements & Hold-Harmless Provisions

• Indemnification Provisions: Define when one party is responsible for certain claims involving the other.
• Hold-Harmless Agreements: May require one party to protect another against specified liabilities.
• Client Supervision: Establishes responsibility for directing and supervising temporary workers.
• Workplace Safety: Clarifies responsibilities for maintaining safe working conditions and providing appropriate training.
• Additional Insured Requirements: Identify when a client must be added to applicable insurance policies.
• Insurance Requirements: Establish required coverages, limits, and endorsements.

Who Needs a Staffing Insurance Package Policy?

A Staffing Insurance Package Policy may be appropriate for temporary staffing companies serving a wide range of industries, including:

The availability of coverage depends on the type of staffing services offered, employee job duties, industries served, and the insurance carrier's underwriting guidelines. Higher-risk operations or specialized professional services may require additional insurance coverage or separate policies.

Common Coverage Limits

Staffing Insurance Package Policies may be available with liability limits designed to meet common contractual requirements. Examples of limits frequently requested by staffing agency clients include:

• General Liability: $1,000,000 per occurrence / $2,000,000 general aggregate.
• Professional Liability: $1,000,000 per claim / $1,000,000 or $2,000,000 aggregate.
• Umbrella or Excess Liability: Additional limits when available and appropriate.

These are examples of commonly requested limits, not guaranteed available options or recommendations for every staffing company. Actual coverage limits and policy structures depend on the carrier and individual risk.

What Is Not Automatically Included in a Staffing Package?

Although a Staffing Insurance Package Policy provides important liability protection, it does not replace every type of insurance a staffing company may need. Other coverages that should be evaluated separately include:

What Determines the Cost of a Staffing Insurance Package?

The premium for General Liability and Professional Liability coverage depends on several factors, including:

• Annual gross revenue
• Industries served and types of employees placed
• Employee job duties and worksite exposures
• Prior claims and loss history
• Geographic areas of operation
• Coverage limits and deductibles or retentions
• Staffing agreements and contractual liability requirements
• Insurance carrier underwriting guidelines

A staffing agency providing office personnel may have different insurance exposures than an agency placing employees in manufacturing, construction, or other higher-risk environments. Providing accurate information about staffing operations is important for obtaining appropriate coverage and pricing.