The staffing industry is unique due to the fact that those hired work for outside firms, as opposed to the company that originally hired them. At the same time, these companies have many of the same risks as other types of entities since they share the responsibility of having employees that report to them. Issues in relation to employment practices spring up from time to time which makes the need for staffing insurance a must to address these concerns. The company can also benefit from additional policies that directly relate to contract work and temporary staff employees.
Temporary staffing agency liability concerns
A temporary staffing agency, or any business using the services of a staffing agency needs insurance that covers liability issues. This will provide coverage for claims arising from wrongful acts of a temp employee, or independent contractor, within the scope of the duties of their job. This is the policy that fills any potential gaps in a commercial general liability (CGL) policy.
For example, if a temp agency places a temp worker at a place of business and the temp is responsible for an injury to another person, the agency will be covered by their liability policy but would not likely be covered by a CGL policy.
Employment Practices is vital insurance for this industry
Another important coverage that all companies, including staffing agencies, need to have in place is employment practices, which is needed when an employee claims they were unfairly treated. Allegations range from harassment and discrimination, to unfair hiring practices, as well as any claims that should be investigated by the human resources department.
The properly screening of job candidates is an important step in reducing employment practices claims. It’s important to find the right fit, but this is a process that usually takes time and should be performed in a proper manner. Staffing agencies must work hard to find workers who are, not only qualified for the position, but will successfully assimilate into their new place of employment. Asking the right questions during the initial interview process is key to finding people that are right for the job.
The point of the interview process is to maximize the quality of information obtained from a candidate, which also requires an intimate knowledge of what can and cannot legally be asked of the applicant. By asking the wrong questions, the interviewer can leave the agency open to staffing insurance risks.