The job market is inherently unpredictable, and agencies need staffing liability insurance to cover themselves. The weather, economy, and population growth can impact employment rates and sometimes cause severe disruptions. When this happens, labor shortages threaten to wreak havoc on businesses, but staffing agencies offer a solution. There are many risks that agencies face, though, that necessitate staffing liability insurance. Consider these facts and figures of staffing liability insurance to see why it’s so important.
Staffing Liability Insurance Covers a Range of Risks
Insurers who market policies to staffing agencies must demonstrate the value that coverage provides. Luckily, it’s not difficult to do so. You can start by sharing this vital fact — staffing general liability insurance includes coverage for a wide range of risks, including the following:
- Wrongful acts
- Harassment
- Discrimination
- Malpractice
- Errors
- Negligence
Job candidates, clients, and contractors can allege these offenses and attempt to collect damages from a staffing agency. Luckily, this coverage provides protection and minimizes the potential for out-of-pocket payment.
Employment Practices Liability Settlements Exceed $2 Million
According to research, settlements for employment practice liability claims can easily exceed $2 million. Settlements this generous are generally rare, but the risk remains that litigation could jeopardize your clients’ business at any moment. Even if a lawsuit does not result in a settlement, legal fees, and court costs can quickly siphon profits and leave a staffing agency in a challenging position. Staffing liability insurance typically covers the expenses associated with this liability.
Wage and Hour Violations Are the Most Common Liability
It’s, unfortunately, true that most liabilities in the staffing industry do not result from malice. Instead, they emerge when simple mistakes or negligence unintentionally cause harm. It often happens with wage and hour violations. The Society for Human Resource Management stated that this is the most common source of liability for employers, including staffing agencies. Your clients need professional liability coverage to minimize this risk.
3 Million Employees Work for Staffing Agencies per Week
Numbers vary regarding how many people work for staffing agencies, but most sources estimate that about 3 million people do so weekly. Although this figure makes up a small portion of the workforce, it’s still significant and illustrates how vital risk management is. Recruiting, hiring, and managing 3 million people comes with many inevitable risks. Still, staffing agencies can limit their exposures by prioritizing safety, complying with legal standards, and investing in the right insurance.
Staffing Liability Insurance Offers Protection
These are the challenges and risks that staffing agencies encounter every day. If you’re working with businesses in this field that need coverage, you can address their pain points with the right staffing liability insurance. In addition to covering common risks such as unfair hiring practices, this kind of coverage can shield your clients from legal action and prevent them from suffering financial fallout due to liabilities.
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 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.