The Many Layers of Staff Insurance to Consider

The Many Layers of Staff Insurance to Consider

There are unique issues facing staffing and temp agencies that often need to be addressed, particularly where staff insurance is concerned. The necessity of maintaining appropriate amounts of insurance cannot be overstated. The risks are simply too high. One issue is the potential for significant coverage gaps, while employment practices liability concerns should also be considered a primary concern.

Determining which policies to purchase

Like all businesses, staffing agencies will benefit from a commercial general liability policy (CGL), and a temporary staffing liability policy is another vital consideration. A CGL policy contains two parts: coverage for property damage and bodily injury caused by accidents, and coverage for personal and advertising injury.

A temporary staffing liability policy provides the insured coverage for claims arising out of “wrongful acts” of one of their employees, a temp employee, or an independent contractor committed within the scope of their duties for the insured. This policy fills any potential gaps in the CGL policy.

The fact remains that employment agencies may offer several different types of employment-related services, or they may concentrate on just one specific industry. Services commonly offered are placing a worker with a permanent position, finding a specific type of worker for a customer company, providing employers with short-term or temporary help, or providing workers with job counseling.

It is very important to make sure that all parties understand their duties and responsibilities in order for things to operate smoothly. The worker who seeks employment, the operation providing the temp employee, and the customer company requiring the temp or part-time worker all must understand fully the terms and conditions of the employment arrangement.

There needs to be strict contractual definition as to where the obligation falls and who is responsible for providing workers compensation coverage, pays the fee for the employment arrangement, handles payment to the employee, accounts for taxes and other mandatory deductions, and who provides miscellaneous employee benefits, if any, such as health insurance or a 401(k) savings plan.

This arrangement can be quite complex and at times a bit confusing. This is why seeking out an insurer familiar with the nuances of operating an employment agency can be a vital resource when it comes to making decisions pertaining to purchasing staff insurance for your company.

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