Staffing Agency Insurance: Cost, Coverage & Providers
Nathan Weller is an Insurance Expert focusing on insurance for small business. He has 15 years experience in insurance operations, FNOL, and claims handling.
Staffing agency insurance refers to policies that cover a staffing agency’s assets and protect it from claims against the business. At a minimum, staffing agencies need commercial general liability (CGL) to cover third-party injuries and property damage—the premium for which can range from $250 to $1,000.
As the intermediary between employers and employees, your specific risks and insurance needs can vary greatly depending on the type of staffing you provide. As such, working with a broker like CoverWallet can get you the right coverage. Answer a few questions about your business, and it can provide you with multiple estimates for comparison in a few minutes.
Staffing Agency Insurance Costs
Providers consider multiple factors when calculating the premium, among which will be the risk associated with your business, the type of coverage, and the limits you select. For example, a temp agency supplying workers in construction or manufacturing will likely pay more for liability than an agency that places white collar jobs.
Insurance Policy | Annual Estimated Premium | Policy Limit | Deductible |
|---|---|---|---|
General Liability | $250 to $1,000 | $1 million per occurrence, $2 million aggregate | $0 |
Professional Liability | $672 to $800 | $1 million per occurrence, $1 million aggregate | $0 |
Commercial Property | $700 to $3,000 | $50,000 | $1,000 |
Employment Practices Liability | $1,078 to $3,200 | $300,000 | $500 |
Insurers consider other factors when determining premiums, including:
- Deductible: A deductible is like a copay—it’s a policyholder’s financial responsibility for a claim. A higher deductible will usually lower the premium but means you agree to pay more when there’s a claim.
- Claims history: Insurers will ask about claims filed in the last three to five years when gathering information for a quote. Numerous previous claims are an indicator of future risk.
- Revenue: If your staffing agency needs workers’ comp, revenue will be factored into the premium.
- Employees: The larger your company, the greater your exposure to employee injury or poor client interactions. Larger firms will often have higher premiums.
- Location: If your agency staffs employees in different states, then your premium may increase.
Workers’ Compensation Insurance Costs for Staffing Companies
Nearly every state requires workers’ compensation insurance for businesses with one or more employees. As such, you’ll need to look into your state regulations to determine if your business needs it.
The cost for workers’ comp premiums is based on a standardized formula that considers the job risk, payroll, and claim history. It shows how a high-risk industry will have a higher workers’ comp premium.
Staffing Agency Insurance Coverage
Since staffing agencies are the employer of record (EoR) for a temporary employee, you’ll be assuming all risks associated with the employee and not the company where they work. As such, there are multiple policies to consider to protect your business.
General Liability & Commercial Property Insurance
The right policies for your business will depend largely on your business structure. General liability policies protect you from claims of bodily injury or third-party property damage. Besides that, if you own or rent a space, then you should consider commercial property as well.
Most insurers will offer the option to bundle general liability with commercial property. This bundled policy is known as a business owner’s policy (BOP) and is often a less expensive way to obtain property and liability insurance. For example, a BOP with $500,000 in liability and $50,000 in property costs $568 annually.
Professional Liability Insurance
Beyond general liability and commercial property, you should consider professional liability. Often referred to as errors & commissions (E&O) insurance, this protects your business if you’re accused of making a mistake when rendering your services. For example, if an international law firm requested someone fluent in Portuguese and, instead, you recommended someone who spoke Spanish, then the firm could come after your agency for the error.
Employment Practices Liability
Employment Practices Liability (EPLI) is another important coverage. It covers wrongful acts in recruiting, interviewing, hiring, and firing an employee. As the staffing agency, if you decide not to interview someone because they disclose that they’re pregnant during the interview process, this could open your agency up to a lawsuit. To avoid this, make sure the questions and assessments aren’t discriminatory.
Best Staffing Agency Insurance Providers
Insurance dedicated to staffing agencies can be challenging to find because of the complexity of employment status for placed clients and the risk involved. The providers here represent either specialty insurers or brokers that can work with multiple carriers to find coverage.
Provider | Best For |
|---|---|
Quick quotes and comparison shopping | |
Agencies in manufacturing and construction placement | |
EPLI for temporary employees | |
Agencies that are American Staffing Association members | |
Agencies working with white collar workers |
CoverWallet: Best for Quick Quotes
CoverWallet is an online insurance broker that, after answering a few questions about your business, can provide estimates for insurance from multiple providers. As our top-recommended insurance broker, it’s an excellent option for staffing agencies wanting to get a quick quote and compare prices from multiple providers.
Cost & Coverage
CoverWallet can provide quotes on multiple policies, including general liability, professional liability, and employment practices liability. We received a sample estimate for a general liability policy that costs $354 annually. This policy had a limit of $1 million per occurrence and aggregate.
Customer Satisfaction & Convenience
Obtaining quotes through CoverWallet is quick and straightforward. Answer several questions about your business, and then it will generate estimates from multiple carriers. If you purchase a policy, you will gain access to a Self-Service Wallet that lets you manage your policy online.
CoverWallet also provides financing plans for paying the policy entirely upfront, and you get to work out a payment plan with CoverWallet.
Financial Stability
CoverWallet is owned by Aon. Aon is rated A (Excellent) by AM Best.
Bankers Insurance: Best for Agencies in Manufacturing & Construction Placement
An independent insurance agency licensed in all 50 states, Bankers Insurance is the best broker for agencies who work in construction, manufacturing, and warehouse placement. This provider has a broad risk appetite and because it’s an independent agency, it can find a carrier that will insure your business and provide the coverage you need.
Cost & Coverage
To start the quote process, answer two brief pages of questions, and then a representative will contact you. Unfortunately, it requires your business to have three years of experience to provide a quote.
Bankers has policy packages and stand-alone policies, whichever is better for your business. The policy it sells is primary, which means if a claim involves one of the employees, your policy comes first in the claim process. Its policies also have a consent-to-settle clause, meaning Bankers won’t settle a claim without the consent of the policyholder.
Customer Satisfaction & Convenience
Bankers has a mobile app for its policyholders, available for Android and iOS. You can file a claim via the app, manage your policy, and request a certificate of insurance (COI).
Its hours are not specified—it just states that it is available during normal business hours. Fortunately, the app functions like a 24/7 call center.
Financial Stability
According to its website, Bankers will only place you with carriers rated A (Excellent) or higher by AM Best.
Philadelphia Insurance Companies: Best for EPLI Policies for Temporary Workers
Philadelphia Insurance Companies (PHLY) is a specialty insurer and is the best provider for staffing agencies that place a high number of temporary employees. It offers an EPLI policy that extends to the temporary employee. It also gives the policyholder the freedom to choose their defense counsel or let the provider select it for them.
Cost & Coverage
You need to contact an independent agent for a quote. Once received, PHLY offers multiple payment plan options.
It has general liability insurance for staffing agencies with limits of $1 million per occurrence and $3 million aggregate. In addition to EPLI and CGL, it sells professional liability insurance, making it possible to get nearly everything you may need from one carrier.
Customer Satisfaction & Convenience
Customers are happy with PHLY’s service: the complaints are well below the national average.
It has a 24/7 claims line for catastrophic losses. You can also manage your account, pay your premium, or file a claim online. On top of that, you have access to instant COIs through its online portal.
Financial Stability
PHLY is owned by Tokio Marine Holdings, Inc, which is rated A++ (Superior) by AM Best.
World Wide Specialty: Best for ASA Members
With decades of experience and being the only insurance company to partner with the American Staffing Association (ASA), World Wide Specialty is the best provider for staffing agencies that are ASA members. For years, it has supported the association, including sponsoring the keynote address of the ASA annual convention.
It’s also a member of 21 national and state staffing associations. The memberships and involvement at the national and state level demonstrate its commitment to being up to date on the trends within the staffing industry.
Cost & Coverage
You can get a quote by filling out a contact request form. A representative will follow up with you, assess your business needs and provide a quote. Then, its underwriters will develop a custom package specific to your agency.
World Wide’s sole focus is providing insurance for staffing companies. Currently, it insures over 6,000 staffing agencies. It also has coverage for independent contractors and staffing consultants.
Its EPLI policy includes built-in HR training to help mitigate any risk when recruiting, interviewing, or hiring an employee.
Customer Satisfaction & Convenience
World Wide Specialty offers 24/7 service for claims and customer service. It is committed to responding to claims within 24 to 48 hours of the loss being filed.
In February 2022, Phly acquired World Wide. Policy and claims services are now handled directly through Phly.
Financial Stability
As a division of Philadelphia Insurance Companies, World Wide has a rating of A++ (Superior) by AM Best.
Hiscox: Best for Agencies Working with White-collar Workers
If your agency specializes in placing IT, finance, and healthcare professionals, then Hiscox is the best staffing agency insurance company. Hiscox’s specific appetite is targeted toward more white-collar, clerical jobs, such as lawyers, architects, and engineers.
Cost & Coverage
We received a quote for a business owner’s policy that costs $1,390 a year. This policy included liability limits of $1 million per occurrence and $2 million aggregate. It also provided $25,000 in property coverage with a deductible of $1,000.
If those limits are too low, you can increase the limits from $1 million per occurrence up to $10 million.
Customer Satisfaction & Convenience
Hiscox offers same-day coverage through its online quoting system. You can also manage your policy or file a claim online. Support is available Monday to Friday, 7 p.m. to 10 p.m. Eastern time, if you need to call.
Complaints with it are slightly higher than the national average.
Financial Stability
Hiscox has an A (Excellent) rating by AM Best.
Bottom Line
Staffing agencies act as intermediaries between employers and employees. Because they come in all sizes and serve nearly every industry, finding the best staffing agency insurance provider can be challenging. Partner with one that can help you identify your risks and ensure you have the right coverage for your operations.
CoverWallet is a broker that can provide multiple quotes to help you get the right insurance for your staffing agency. Get a quote today.
