Staffing Professional Liability Insurance
Staffing firms make all types of placements – from industrial to clerical, attorneys, architects, engineers, and programmers, to financial and healthcare. Regardless of what type of placement the staffing firm makes they all need Professional Liability insurance. There are three main categories of exposures that staffing firms face: the placement exposure, actual work performed by the temporary worker and any additional service(s) the staffing firm is affording to its clients.
- Placement. This involves failure to provide the workers themselves to a contracting client, providing wrong or improper workers, failure or improper screening, and failure or improper testing. In addition, there is a much-often overlooked placement exposure that involves a worker bringing a lawsuit against the staffing firm for allegedly misrepresenting the company with which he or she was placed. Direct Hire, Executive Search and Recruitment, Retained Search, Temporary Placements and any staffing firm from an ASO to PEO that makes any placements should have Professional Liability coverage, also called Errors and Omissions (E&O) Liability insurance.
- Work Performed. This is the most recognized and understood exposure. This involves a contract worker who has the necessary background according to the staffing firm but makes mistakes that results in a financial loss for the client. The staffing firm is responsible for the job its employee does and doesn’t perform, or does improperly. Medical placements increase the staffing firm’s exposure to medical malpractice. In fact, the presence of a nurse alone is enough to draw him or her into a claim. Medical placements in emergency rooms and during surgical procedures have a higher exposure and are most often part of any claim in those areas – not to mention the standard mistakes that medical professionals make. Physical therapists are also the subject of many claims as they deal with the most frail of patients. Attorney placements, financial placements, IT placements all make mistakes on the job, as well. The difference is as temp placements they are the employees of the staffing firm, which is responsible for their mistakes.Claims from non-professional placements can be just as expensive as claims from professional placements. Temporary administrative assistants who fail to advise or improperly advise their administrator about something as simple as a phone call can result in large loss for a client. Industrial assembly line workers improperly doing their assigned function will affect the final product that can cause a loss. A simple mislabeling by a line worker has caused large losses to staffing firms.
- Services Provided. These involve services the staffing firm is providing to their clients above and beyond the placements, such as consulting activities for clients and on a greater scale the services provided by a PEO or an ASO. There are also many IT-type services provided to clients that do not include the proviso of temporary employees, with these IT services falling into this category. Any services provided to clients can result in mistakes, dissemination of improper information, failure to act or failure to advise, all of which can result in sizeable claim situations against the staffing firm.
It is important for staffing firms that make professional placements to secure Professional Liability insurance. In addition, be aware that staffing placements and services are often the subject of class action suits involving a large number of people bringing suit for the same mistake or failure to act.