Inside Crime Risks of Staffing Agencies

staff insurance

The staffing industry is tasked with supplying workers to other companies needing to fill positions on what is normally a temporary basis. Because of certain unique liability exposures, they need to supplement their staff insurance policy with additional coverage for instances not frequently covered under a standard insurance policy.

One exposure faced by temp agencies that must be considered when purchasing staff insurance is a crime or fidelity policy. Crime insurance protects organizations from loss of money, securities or inventory resulting from employee dishonesty, embezzlement, forgery, computer and wire transfer fraud, all of which can be of great concern.

Initiating fraudulent acts

One way that a dishonest employee can siphon funds out of an organization is through the use of fictitious accounts and. They may also create invoices to non-existent suppliers. Generally, an employee is often found guilty of simply stealing money, securities or property at their disposal. These scenarios, actually quite common, are geared to take advantage of potential weaknesses in a company’s financial controls.

While employees are primarily supervised at locations owned by the agency’s clients, the agency remains liable for their actions. People who look for work at temp agencies are often between jobs and are hard-working individuals trying to support their families. Still, someone with ulterior motives may apply for a job in order to get a position at a place of business for the sole purpose of committing a crime. Since their employment is only for a short period of time they’re hoping to avoid detection.

The interview process, along with reference checks, is designed to weed out undesirables; still, some are clever enough to present themselves in a good light. With a clean record and solid references, they could easily pass the interview and gain access to unsuspecting clients.

Once hired, a temp employee may attempt to access personal information of clients and employees, selling anything of value to another party, including credit card and social security numbers. If the theft is traced back to the temp worker they could face prosecution, a risk they are obviously willing to take. Without staff insurance to address criminal acts, the loss could wind up being costly with the temp agency is responsible for the actions of their employee. Speak to an agent and don’t allow yourself to do business without this vital coverage.