Staffing agencies often fill crucial labor needs for companies of all sizes and provide needed employment to a variety of skilled professionals. In spite of the benefits these agencies bring to the workforce, staffing companies face a wide range of risks that could jeopardize their ability to do business. Carrying insurance for temporary staffing company can help defray much of the financial impact of these risks, but it is also wise to know what the nature of the exposures are to devise a risk management strategy.
1. Employee Injuries
The relationship between the individuals hired by the staffing agency and contracted to a third party can be complex in the area of injury and workers comp coverage. Though an employee may be physically working on-site at a third-party company, the initial hiring agency carries the brunt of the legal liabilities over workplace injuries. As such insurance coverage needs to include workers comp issues.
2. Employment Practices
Even though an agency is able to hire according to resume and best fit, there are still potential claims of discrimination or employment practices that can cause problems. Employees are still eligible for the same protections against discrimination, harassment and workplace violence, even though they may be work off-site. The risks need to be considered when purchasing coverage and contracting with third-party businesses.
The liabilities of a staffing agency are similar to any other business. These risks must be addressed through both insurance and preventative strategies.