When a placed employee alleges discrimination or harassment, the staffing firm and its client may both end up answering the charge. Staffing insurance solutions need to account for that shared exposure, and employment practices liability insurance (EPLI) is the coverage that responds to these allegations. The U.S. Equal Employment Opportunity Commission (EEOC) received 88,531 new discrimination charges in fiscal year 2024, a 9.2% increase over fiscal year 2023. Before you compare policies, get clear on who employs the worker and what role the client company plays.
What Makes a Staffing EPLI Review Different?
In a conventional workplace, the employer that pays the employee also controls the day-to-day work. Staffing arrangements may split those responsibilities. The staffing firm employs the worker, while the client may supervise the job, set workplace rules, and direct the employee’s daily activities.
That division can complicate an employment practices claim. An allegation by a placed employee may involve conduct by the staffing firm, the client, or both. Whether the client qualifies as a joint employer is a separate legal question that depends on the facts; the employee’s worksite alone does not decide it.
For underwriting purposes, the key point is that the relationship must be understood before a quote is issued. Who supervised the employee? Who set the relevant workplace rules? Who made the employment decision at issue? Those details help clarify the exposure and the coverage questions that need to be addressed.
What Should Agents Examine in the Employment Relationship?
The questions above apply to a single allegation. For the account as a whole, ask the staffing firm about each major client:
- Who employs the worker and runs payroll?
- What does the client service agreement say about each party’s responsibilities?
- Does the day-to-day relationship match the contract?
The answers show you how an allegation could unfold. When a client company supervises placed workers and decides when assignments end, the staffing firm may end up defending conduct it didn’t direct. The answers also indicate what the EPLI policy needs to cover.
Don’t build staffing insurance solutions based solely on the business description in an application. Two light industrial firms can describe their businesses in the same way and still manage their client accounts differently. At one, the staffing firm’s own supervisor may manage workers on-site. At another, the client may handle supervision and end assignments. The differences change where an allegation could start, and they belong in the EPLI review.
Does the EPLI Policy Reflect the Staffing Arrangement?
With the relationship mapped, turn to the policy. Three parts of the form indicate whether it fits how the staffing firm operates.
Start with the people who can bring a claim. A staffing firm can face allegations from applicants, in-house employees, and placed employees. Check that the policy extends to all three, including placed employees working at client locations.
Next, check the client company’s status. A charge can name the client alongside the staffing firm, so find out whether the policy treats the client as an insured and on what terms. A program like the one offered by World Wide Specialty Programs includes clients as insureds under the staffing firm’s agreement with them. It also provides defendant coverage for a client company of the insured. In that program, client status depends on the service agreement, so keep a copy of each agreement in the account file.
Then read the policy’s definition of a claim. Check whether it reaches administrative charges, such as those filed with the EEOC, as well as lawsuits.
If the policy and the arrangement don’t align, flag the gap with the underwriter before you bind. Whether a particular claim receives coverage still depends on its facts and the policy language. Once you know how the arrangement works, staffing EPLI coverage options become easier to compare.
Review the Relationship Before the Claim
The workplace where an allegation surfaces won’t tell you who employed the worker. It won’t tell you what the contract promised, either. Good staffing insurance solutions start with those answers.
Get the arrangement straight, and read the client agreements. Then hold the policy up against both. Repeat the review when the firm signs a new client or changes the services it offers.
Reviewing EPLI on a staffing account? Call World Wide at (877) 256-0468 to work through it with the staffing insurance team.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and are committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.