Temporary staffing agencies keep companies running during worker shortages. They also help employers find the best talent for competitive positions. If you run a staffing agency, you don’t only help other companies with their workers, you manage your own. Accordingly, you encounter a litany of legal risks every single day. To protect your firm from potentially costly lawsuits, you must have a strategy. Temporary staffing insurance is a critical component of any action plan.
Temporary staffing agencies are often the intermediaries between workers and companies. As such, they frequently face friction from both sides. To avoid liability, you may want to purchase the following types of insurance for relationship-management purposes:
General liability insurance
Professional liability insurance
Workers’ compensation insurance
Training both contract employees and client companies has a place in your risk management strategy. By collaborating with the right insurance partner, you receive access to the educational tools you need to facilitate training, control costs, and avoid liability.
With the right temporary staffing insurance policy, you protect your firm from a variety of damages. Of course, you probably can’t choose the perfect coverage package without some professional help. By working with a competent agent who services temporary staffing firms, you generally increase your chances of avoiding costly litigation.
Temporary staffing agencies provide a short-term workforce that consists of skilled workers available at a moment’s notice. They cannot afford losses occurring due to issues of negligence on the part of workers, or injuries or other occurrences that might affect their ability to provide employees to their clients, which is why staffing companies carry temporary staffing insurance at all times.
There are many factors that can affect a staffing company’s success, including employee work ethics, negative reviews that affect the staffing company’s reputation, and competition. A review of these factors can show how a successful temp agency can endure any and all work-related issues.
Hiring the right people
The key is to build a strong team of employees that can be depended upon to fulfill their obligations, regardless of the length of the assignment. Employees failing to arrive on the job site on time can have a negative impact on the organization. Temporary staffing agencies try to attract employees with a strong work ethic. This is most evident during the interview process.
A temporary staffing company is only as good as the employees it sends to its clients. If a difficult employee creates a situation on a job site that is cause for concern, prompt and professional attention to the situation is the best way to protect the staffing agency’s reputation.
Ethics are a vital commodity
It is a staffing company’s legal and ethical responsibility to meet all Equal Employment Opportunity Commission (EEOC) requirements. Some clients may have unethical requests, such as not hiring disabled employees or not giving minority workers equal opportunities. It is always best to leave these types of clients to the competition. Why risk having to defend unethical practices and possibly increase the cost of temporary staffing insurance?
Competition can be fierce
A common strategy some staffing agencies might use is significant underbidding on jobs. While there may be the occasional client that feels negotiating a lower-than-standard fee is worthwhile due to the volume of business they receive, this practice should be avoided as it lowers the profit margins throughout the entire market. Setting minimum fees and standing by that price may cost a staffing company a few of the lower paying clients, but the clients that are willing to pay a reasonable fee are the type of companies that staffing agencies should strive to attract.
Temporary workers can expose a staffing firm to risk if the firm’s liability policies do not include temporary staffing insurance. Even if a staffing firm carries a commercial general liability plan and other specific varieties of liability coverage including an employment practices plan, additional endorsements could be needed in order to cover temporary workers.
Why Are Temporary Workers Excluded From General Liability?
Although temporary workers can benefit client businesses in many ways, these workers are also exposed to much greater risks than either permanent employees or leased workers on longer contracts. Recent studies have indicated that temporary workers are much more liable to being seriously injured on the job. Limited training is one major cause of this heightened risk. Permanent and leased employees are usually sufficiently trained and are therefore covered by general business liability policies.
What Kinds of Protection are Available for Temporary Workers?
Staffing firms that place temporary workers will likely require endorsements or modifications to their liability coverage. An insurance provider that has extensive experience with temporary staffing insurance can modify an employment practices liability plan and close gaps in coverage. Adjusting liability plans can help to protect temporary workers and staffing firms from a wide variety of exposures to risk and claims made against either party.