Insurance for staff agencies is a collection of policies that agency owners can buy to protect their assets. The policy covers the risks that many employment agencies are exposed to and pays for the associated costs. General liability is required by most agencies to protect third-party injuries or property damage. It costs between $400 and $1,000 each year.
Insurance costs for staffing agencies can be very different so it is a good idea to compare offers from multiple carriers. CoverWallet makes it easier to obtain quotes from multiple insurance companies. It takes less than five minutes for most owners to complete the application.
- 1 How staffing insurance works
- 2 Insurance for Staffing Agencies
- 3 Different types of insurance for staffing companies
- 4 Additional Insurance Policies for Staffing Agency Insurance
- 5 Insurance providers for staffing agencies
- 6 Tips for Obtaining Staffing Agency Insurance
- 7 Bottom line
How staffing insurance works
Based on the business they operate, staffing agencies are exposed to different risks. Each agency owner must choose the right staffing insurance policy for his or her business. While most states require agencies to have workers’ compensation insurance for their employees, temp staffing agencies must also be covered for workers placed with clients.
General liability and commercial property insurance are required for all types of staffing agencies. Staffing agency owners are often able to get coverages in a Business Owner’s Policy (BOP) at a fraction of the cost of purchasing separate policies. This is because they have fewer risks for third-party suits and expensive property damage. BOPs for staffing agencies usually cost between $500 and $1,500 annually.
Insurance for Staffing Agencies
Insurance costs for staffing agencies depend on how many policies are purchased and what coverage is selected. The industries they work in are another important consideration. Tempo agencies that provide workers in construction or manufacturing will likely be more expensive than those that place clerical workers.
Insurance costs & deductibles for staffing agencies based on insurance type
|Types of insurance||Annual Premium||Maximum Coverage||The Average Deductible|
|General Liability Insurance||400 to 1,000||$1 Million per occurrence/ $2,000,000 aggregate||*From $0 to $1,000|
|BOP||From $500 to $1,500||Liability: $1 million / $2 million
Property Variables based on property values
|From $200 to $500|
|Professional Liability Insurance||$700 to $2,500||$1 Million per occurrence/ $2,000,000 aggregate||*From $0 to $1,000|
|Workers’ Compensation||From $200 to $2,000||Variables based on the industry and the insurance provider||Variables based on state law|
General liability insurance doesn’t usually have a deductible. However, business owners can request one to lower their premiums.
Insurers consider other factors when calculating the cost of staffing agency insurance. Other factors such as business characteristics and policy selection are also important.
Other factors that insurers take into consideration when setting premiums include:
- Deductibles – A deductible is a sum that a policyholder is responsible to pay for in the event of a claim. A higher deductible will usually result in a lower premium.
- Claims history Multiple claims can make a company look risky to an insurance company, so they tend to increase their costs accordingly.
- Revenue:Insurers charge higher premieres to staff agencies with higher revenues because they may be more likely to face expensive lawsuits.
- Employees: A higher staff number means more employee theft and injury, as well as increased opportunities for bad client interactions. Larger firms are more likely to have higher premiums on workers’ compensation, general liability, or commercial crime.
Workers’ Compensation Insurance for Staffing Companies
Nearly all staffing agencies require workers’ compensation insurance to protect their employees. Except in Texas, workers’ compensation insurance is mandatory to cover the medical bills and lost wages of injured employees. Temporary staffing agencies need to provide coverage for workers who are employed in other companies, which increases their staffing insurance costs.
Workers’ compensation insurance costs for staffing companies are determined based on the job risk of each employee, its payroll and claims history. Employers often pay higher rates for workers’ compensation when employees are in high-risk occupations. Workers’ compensation costs for residential builders can range from $2.82 to $35.95 for $100 worth of payroll, while those for clerical workers are often 8 cents or $1.48 per $100 worth of payroll.
Tip – Safety training is a great way to keep your employees safe, reduce worker’s comp claims, and lower the cost of staffing insurance. Although they may hire workers from other companies, these temps are still staffing agency employees. The agency owner is responsible therefore for their safety.
Different types of insurance for staffing companies
Staffing agencies are exposed to risks. They need staffing insurance in order to protect their assets against lawsuits and other accidents. General liability, workers’ compensation, and commercial property insurance cover the most common risks to staffing agencies. To cover additional risks such as employee crime and negligence, agencies might need other staffing policies.
The Most Popular Types of Staffing Insurance Policies
|Types of insurance||It covers|
|General Liability Insurance||Nonemployees have made allegations of bodily injury, property damage and reputational damage|
|Commercial Property Insurance||Repair and replacement costs of business-owned property including real estate, equipment and fixtures|
|Workers’ Compensation Insurance||Employees who are injured or suffer from work-related illness and injury may lose their wages and have to pay medical bills.|
|Commercial Crime Insurance||Criminal activities can result in the loss of money, securities, or other property.|
|Professional Liability Insurance||Client claims of professional negligence can result in legal fees|
General Liability Insurance
General Liability Insurance covers staffing agencies by covering third-party claims for property damage, injury to the body, and advertising injuries such as defamation. General liability usually covers your legal fees and the medical bills of the injured party if your company is accused.
Here are some examples of general liability claims:
- Client accuses you of damaging their copier while on temporary assignment
- An electrician is accidentally tripped by a delivery driver in your reception area
- Your social media manager sent a tweet that was defamatory to a competitor and he sued.
These claims are typically covered by standard general liability policies, regardless of whether you or your employees cause them. Because temporary staffing agencies employ agency workers, their general liability coverage also covers workers placed in other businesses.
Commercial Property Insurance
Insurance for commercial property covers damage to agency property that is caused by fire, theft or vandalism. Your policy covers your agency’s office space, equipment, furniture and fixtures up until the coverage limit. This excludes your deductible. Agent owners can choose to insure only their office contents with commercial property insurance.
Staffing agencies have very low property exposures. This combined with the low risk of general liability lawsuits means that most agencies are eligible for a BOP.
Workers’ Compensation Insurance
Most states require workers’ compensation insurance to be purchased by staffing companies in order to pay for employees’ medical bills and lost earnings if they are injured or suffer from work-related illness. Business owners may be required to buy coverage from the state fund or purchase it through their state laws when they hire employees. Some states require coverage even for one employee.
Only staffing agencies that hire permanent workers need to have workers’ compensation insurance. Temporary staffing agencies require coverage for both their in-house workers and the workers they place with clients.
Because agency-paid temporary workers are not independent contractors, they don’t meet the IRS requirements. They are paid per hour and cannot manage their work situations.
Commercial Crime Insurance
Commercial Crime Insurance Covers financial and property loss due to illegal acts, including forgery and computer fraud. Temporary staffing agencies require endorsements for clients’ items, as most policies only cover the property and funds of the policyholder.
These are some situations that could trigger insurance for crime insurance:
- An accused temporary worker was charged with stealing inventory from a retailer client
- Your bookkeeper committing check fraud
- Theft of money from your agency by a burglar
Most commercial property policies do not cover theft of money or securities. They also don’t cover dishonest employees. This makes commercial crime insurance a valuable policy for any company, but particularly for temporary staffing agencies.
Professional Liability Insurance
The errors & omissions insurance also known as professional liability insurance, protects your staffing agency from lawsuits arising out of your professional services. Professional liability insurance covers your legal costs if you are accused by a client of sending an unqualified candidate.
The following are some other examples of professional liability insurance that may be covered:
- Mistakes: Sending applicants to the wrong interview could cost them a job
- Omissions Failure to conduct background checks
- False statements: Inflating a worker’s qualifications in order to get them a job
For staffing agencies, some insurers offer both professional and general liability coverage under one policy. Although this may seem like a cost-saving strategy, owners should verify that the coverage is adequate.
Additional Insurance Policies for Staffing Agency Insurance
These are the five insurance policies that staffing agencies require. Many owners work in supply or operations that require additional insurance.
Cyber liability insurance, commercial auto coverage, and computer and media coverage are just a few of the other types of staffing insurance policies that agency owners might need.
Cyber Liability Insurance
Cyber liability insurance covers the costs of data breaches and cyberattacks such as client notification and credit monitoring. Many agencies are exposed to cyber liability, even though any employee could accidentally reply to a phishing message. The greatest risk may be for information technology staffing agencies.
Commercial Auto Insurance
Staffing agencies that have business-owned vehicles will likely require commercial automobile insurance. While most states require that business owners have at least the minimum level of liability coverage in order to protect themselves against injuries and damage caused by their employees, owners can purchase coverage that covers them for any injuries and damages. For vehicles they rent, borrow or hire for business, they can get both owned and hired auto liability insurance.
Computers & Media Coverage
Computers and Media coverage (also known as electronic data processing coverage) helps to pay for the restoration or replacement of digital data lost by your agency’s network or computers due to certain perils such as theft, vandalism and malware. Some policies cover hardware and software repairs. These items are not covered by commercial property policies.
Insurance providers for staffing agencies
It can be challenging to get insurance for staffing agencies, especially if you have temporary workers and need insurance in different locations. Agency owners often have to look for specialty insurance companies or find brokers that have access to multiple carriers in order to get coverage.
Top Staffing Agency Insurance Providers
|CoverWallet||Owners of staffing agencies who wish to compare quotes before purchasing insurance|
|Bankers Insurance||Agent owners who are looking for a combination of professional and general liability policies|
|Philadelphia Insurance Companies||Employer practices liability insurance (EPLI), is required for staffing agencies that have employees.|
|Intego||Owners of staffing agencies who wish to reduce the stress associated with workers’ compensation audits|
|World Wide Specialty Programs||Agents who are looking for premium discounts or free legal advices|
The following are some of the most reputable insurance providers for staffing firms:
CoverWallet can provide coverage to employment placement agencies and small business insurance. To help small businesses find the right coverage, the company partners with top-rated insurance carriers such as CNA, Chubb and Liberty Mutual.
When they are looking for staffing insurance, agency owners should apply with CoverWallet to get staffing coverage. CoverWallet allows you to easily get multiple quotes from quality insurers with one application. This transmits your business information directly to all carriers. It takes less than five minutes and can often return multiple quotes.
Bankers Insurance can provide temporary staffing agency coverage. Bankers Insurance agents are often able to negotiate lower prices for clients, in addition to providing quotes from multiple carriers.
Bankers Insurance offers a unique option that allows you to combine both general and professional coverage into one policy. Bankers Insurance is ideal for agencies that want to manage one insurer, one premium, and one policy for both of these essential coverages.
Philadelphia Insurance Companies
Philadelphia Insurance Companies is a national financial carrier that has been creating insurance products for niche markets since more than 55 years. They have developed a flexible package to support temporary staffing agencies after years of experience working with difficult-to-insure companies.
The PHLY temporary staffing agency insurance program includes high general liability limits, up to $3 million coverage for the term of the policy. PHLY is a good choice for business owners looking to cover employment practices liability. The policy covers workers who are placed with clients. However, the insured can choose to use their own counsel and/or the carrier’s counsel.
AP Intego offers a full range of business insurance policies. However, their specialty is workers’ compensation insurance. You can pay your workers’ compensation premium as you go. This plan is based on your actual monthly salary and not an estimate for the entire year.
AP Intego’s payment program makes it an ideal company for staffing agencies that want to pay monthly premiums accurately. This will ensure they don’t have unexpected bills when it comes to their workers compensation audit. Your payroll service coordinates with the company’s technology to automatically withdraw premium payments and determine the correct premium.
World Wide Specialty Programs
World Wide Specialty Programs, an insurance company that is solely focused on the staffing industry, can provide customized solutions for all types and sizes of staffing agencies. Zurich, an industry leader with over 140 years of experience in creating insurance programs for niche markets, provides company coverage.
Agent owners may consider World Wide Specialty Programs because of the company’s experience. But, a bigger benefit is the possibility for discounts through partner organizations. American Staffing Association members can receive premium discounts, and all World Wide EPLI policyholders get a free consultation with Jackson Lewis, LLP.
Tips for Obtaining Staffing Agency Insurance
Staffing agency insurance is vital for your business’ success. However, it’s not as easy as choosing policies and paying the premium. You can take steps to ensure you are getting quality coverage at an affordable price.
An agent who knows the industry is a good choice
Agents who are familiar with the staffing industry should be able to assist agency owners. Although staffing agencies are generally exposed to a set of unique risks, some may also be subject to additional risks due to their particular operations. A staffing agency agent who has industry experience will be able to identify these risks and recommend the right staffing insurance for your business.
Compare Quotes from Multiple Carriers
Insurance is the second-highest overhead cost for staffing agencies after payroll. Agency owners need to be able to find affordable coverage while still protecting their business. The best way to do this is to compare multiple quotes. An insurance broker can not only help you find a good rate, but it will also help you to navigate the differences among your options.
Correctly Classify Your Staffing Agency
Many people use the terms employment agency and staffing agency interchangeably. Employment agencies place permanent workers for insurance. This distinction is critical to make when you apply for insurance.
Staffing agencies can be of any size and offer services for almost all industries. It is not easy to find the right insurance provider and funding for staffing agencies. To ensure that their agency has the right coverage, they must identify their risks and work with professionals who are familiar with the industry. An insurance agent who is knowledgeable and helpful can help owners find the best practices and create safety programs, which will reduce their insurance costs.