A staffing client may already carry general liability (GL), but a placement can create exposures that point beyond a GL policy. When reviewing staffing liability insurance, agents should consider what could go wrong, what kind of loss could follow, and which staffing activity created the exposure.
General liability and professional liability can overlap around the same client relationship, worker, or assignment. The distinction comes from the allegation and the activity behind it, not simply from where the worker was placed.
Start With What Could Go Wrong
Consider a temporary worker assigned to a client’s warehouse. One possible loss involves the worker damaging a piece of equipment. Another involves the same worker entering incorrect inventory data, leading to order errors and a financial loss for the client.
The worker, client, and location are identical. The potential claims are not.
Equipment damage points toward the general liability coverage available to staffing companies. A program like WWSPI’s also extends its occurrence-based GL coverage to damage caused by contract employees while on assignment, including property in the insured’s care, custody, or control, up to the GL limits.
The inventory error may instead warrant a professional liability review because the alleged financial loss stems from the worker’s performance of assigned duties.
Look at the Loss, but Don’t Stop There
A financial loss tied to a staffing service may prompt an agent to examine professional liability insurance for staffing firms. The absence of bodily injury or property damage can help narrow the review.
Loss type alone, however, should not become the deciding rule. A physical loss does not automatically make a claim a GL matter, and a financial loss does not automatically make it a professional liability matter. The wording of the allegation, the service involved, and the policy terms all affect the analysis.
Follow the Exposure Back to the Staffing Activity
Agents also need to ask what the staffing firm was doing when the exposure arose. Was it selecting or placing a worker? Was the worker performing assigned duties at the client’s direction? Did the staffing firm provide another service connected to the alleged error?
The answer can vary by account. Bureau of Labor Statistics data counted over 2.9 million jobs in temporary help services in May 2023. Within that industry, occupations range from registered nurses and human resources specialists to production workers and material-moving workers.
A staffing firm placing warehouse employees presents a different set of possible liability scenarios than one supplying health care or administrative professionals.
Review the Account From Both Directions
Agents do not need to predict the exact claim a staffing firm might face. They do need to understand enough about the client’s placements and services to see where GL ends and another liability exposure may begin.
Start with the work being performed, consider the potential losses, and then compare those scenarios with the language in each policy. That approach gives agents a clearer way to evaluate whether an account’s liability program addresses both operational exposures and allegations arising from staffing services.
Contact World Wide Specialty Programs to discuss a staffing client’s liability exposures and available coverage.
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.