Staffing agencies have a unique legal relationship with their employees and, as a result, unusual insurance coverage needs. Decision-makers at some staffing agencies may believe workers’ compensation insurance is one type of coverage that these agencies do not need, since staffing employees effectively work for other companies. However, this coverage represents an essential part of any staffing insurance policy for the following reasons.
In most cases, staffing agencies, rather than their clients, are legally responsible for providing workers’ compensation insurance for temporary staff. Agencies that fail to do so may face fines as well as financial liability for any claims that should have been covered by workers’ compensation insurance. In addition to insuring temporary staff, agencies are responsible for providing insurance coverage for their own full-time staff.
Heightened Claim Risk
Temporary staffing employees may be more likely to make workers’ compensation claims for a few reasons. Since the staffing industry often sees high turnover rates, many employees are inexperienced. Even after proper training, these employees may be likelier to experience work-related accidents. Additionally, staffing agencies are not directly responsible for monitoring daily working conditions and ensuring best practices. Consequently, it can be difficult for staffing agencies to fully mitigate the risk of claims.
Ensuring Adequate Coverage
In light of these risks, workers’ compensation coverage represents an essential part of a strong staffing insurance policy. Staffing agencies that lack appropriate coverage should work with an insurance agent to find a policy that can offer full protection against this potentially costly risk area.