Risk Profile
The following is a Risk Profile from Rough Notes that you may find helpful in understanding temporary staffing agency insurance needs. Contact us and ask for a full risk review.
Description of operations: Employment agencies may offer several different types of employment-related services or they may concentrate on just one 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 the worker seeking employment, the employment operation, and the customer company seeking the worker understand fully the terms and conditions of the employment arrangement. There needs to be strict contractual definition as to who is obligated and responsible for providing workers compensation coverage, who pays the fee for the employment arrangement, who handles payment to the employee, who 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.
Property exposures are usually light and are made up of office-type hazards. There may be some theft potential, depending on the amount and type of electronic equipment on hand.
Crime exposure comes from Employee Dishonesty. It is important to keep billing and disbursements as separate duties. Regular audits are also important.
Inland marine exposures consist of Computers, Valuable Papers and Records, and Accounts Receivable. Duplicates should be made and kept in an off-site backup facility for easy reproduction following a loss.
Premises liability exposure is moderate due to the number of clients visiting the premises. The waiting area and other places where the client has access must be well lighted with floor covering in good condition. Personal injury liability is a high-potential exposure. The agency must take great care to maintain confidentiality when releasing information regarding workers and employers.
Professional liability exposure is of high concern. The background, training, and licensing of the agency’s own employees requires review and evaluation. All procedures must be followed and licenses maintained. Employees must be matched with the needs of clients. Misrepresentation of either party may result in allegations of negligence.
Automobile liability exposure depends on whether or not any transport is involved, such as shuttle for temporary workers or transport to job interviews. The automobile exposure will increase significantly if any transport is offered or if employees use their own vehicles for agency business. Drivers must have appropriate licenses for the exposure. MVRs should be run on a regular basis. Vehicles must be maintained and records kept in a central location.
Workers compensation exposures can be limited to office-type hazards if no employees of the company are leased or rented out. Exposures can increase significantly when workers are leased or rented out as the company has little control over the client’s work premises or hazards. The employment contract should specify whether the company and the client provide workers compensation coverage.
Minimum recommended coverage:
Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers, General Liability, Employee Benefits, Professional, Umbrella, Hired and Non-owned Auto, Workers Compensation
Other coverages to consider:
Forgery, Computer Fraud, Employment Related Practices, Business Automobile Liability and Physical Damage
Reprinted copyrighted material with permission by the Rough Notes Company, Inc.
