Staffing Agency Insurance: Cost, Coverage & Providers

Staffing agency insurance is a set of business policies agency owners can purchase to protect their assets. Each policy covers different risks many employment agencies face by paying for the costs associated with them. At a minimum, most agencies need general liability to cover third-party injuries and property damage and cost $400 – $1,000 annually.

Staffing agency insurance costs can vary greatly, so owners usually benefit from comparing offers from a number of carriers. CoverWallet makes that easier with a single application most owners can complete in less than five minutes to get quotes from multiple insurers.

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How Staffing Insurance Works

Staffing agencies face different risks based on their business operations. Consequently, each agency owner needs to select the staffing insurance policies that work for their business. Most states require agencies to carry workers’ compensation insurance for their onsite employees, but temp staffing agencies need coverage for the workers they place with clients too.

All types of staffing agencies also need general liability and commercial property insurance. Because of their low risk for third-party lawsuits and costly property damage, staffing agency owners can usually get these coverages in a business owner’s policy (BOP) for less than what they’d spend on separate policies. Staffing agency BOPs usually cost $500 to $1,500 per year.

Staffing Agency Insurance Providers

Getting staffing agency insurance can be difficult, especially for agencies that place temporary workers since they have insurance needs in multiple locations. As a result, agency owners usually have to find specialty insurers or work with brokers who have access to multiple carriers to find coverage.

Top Staffing Agency Insurance Providers

Some of the top providers of insurance for staffing companies include:

CoverWallet

CoverWallet is an online broker that specializes in small business insurance for a number of industries and can offer coverage to employment placement agencies. The company partners with top-rated business insurance carriers, including CNA, Chubb, and Liberty Mutual, to help small businesses find appropriate coverage for their operations.

Agency owners should apply for staffing insurance with CoverWallet when they want to comparison shop. CoverWallet makes it easy to get multiple quotes for quality insurers by offering a single application that transmits your business information to all available carriers. The application takes less than five minutes to complete and often returns multiple quotes.

Bankers Insurance, LLC

Bankers Insurance, LLC is a full-service independent insurance agency that can get temporary staffing agencies coverage. In addition to offering quotes from multiple carriers, Bankers agents can often negotiate better prices for their clients.

One of Bankers most unique offerings is the option to combine general and professional liability into a single policy. This streamlines administration and makes Bankers ideal for agency owners who want to deal with one insurer, premium, and policy for these two essential coverages.

Philadelphia Insurance Companies

Philadelphia Insurance Companies, or PHLY, is a financially-sound national carrier that has been developing insurance products for niche markets for over 55 years. Their experience with hard-to-insure businesses has led them to create a flexible package for temporary staffing agencies.

PHLY’s temporary staffing agency insurance program starts with high general liability limits—up to $3 million in coverage over the course of the policy term. However, business owners who want employment practices liability coverage should consider working with PHLY. The policy automatically extends to workers placed with clients, and the insured can opt to use their own counsel or the carriers.

AP Intego

AP Intego is an online insurance agency that offers a full lineup of business insurance policies, but their bread-and-butter is workers’ compensation insurance. They have a workers’ comp pay-as-you-go plan that bases your premium on your actual monthly payroll rather than an estimate for the year.

AP Intego’s payment plan makes them the ideal company for staffing agency owners who want to pay accurate monthly premiums so they don’t have to worry about unexpected bills when it’s time for their workers’ compensation audit. The company’s technology coordinates with your payroll service to not only determine the appropriate premium, but also automatically withdraw payments.

World Wide Specialty Programs

World Wide Specialty Programs is an insurance company that focuses solely on the staffing industry and can offer customized solutions for all kinds of staffing agencies. The company coverage comes from Zurich, a leader with over 140 years of experience creating insurance programs for niche industries.

Agency owners might consider working with World Wide Specialty Programs for the company’s depth of experience, but an even bigger draw is the potential discounts the company makes available through partner organizations. Members of American Staffing Association can get premium discounts, and any World Wide EPLI policyholder receives free consultation time with the law firm Jackson Lewis, LLP.

Types of Insurance for Staffing Companies

Staffing agencies face risks, so they need staffing insurance to protect their assets in case of lawsuits or accidents. Their most common staffing agency risks are covered by general liability, commercial property, and workers’ compensation insurance. However, agencies may require other staffing insurance policies to cover other risks, like negligence accusations and employee crime.

Most Common Types of Staffing Insurance Policies

General Liability Insurance

General liability insurance protects staffing agencies by paying the costs associated with third-party claims of property damage, physical injury, and advertising injuries, such as defamation. If your business faces one of these accusations, general liability typically covers the injured party’s medical or repair bills or your legal fees if they decide to sue.

Some general liability claim examples include:

• A client accuses your staffer of damaging their copier when on temporary assignment
• A delivery person trips over an electrical cord in your reception area
• A competitor sues for defamation over a tweet sent by your social media manager

Standard general liability policies typically cover these claims whether they are caused by your or your employees’ actions. Temporary staffing agencies’ general liability coverage extends to the workers they place in other businesses because those workers are agency employees.

Commercial Property Insurance

Commercial property pays for repairs to agency-owned property when it’s damaged by fire, theft, vandalism, or other covered perils. Policies cover your agency’s physical space, office equipment, furniture, and fixtures up to the coverage limit, minus your deductible. Agency owners who rent can opt for commercial property insurance that covers only their offices’ contents.

Staffing agencies typically have minimal property exposures. This, combined with their comparatively low risk for general liability lawsuits, means most agencies qualify for a business owner’s policy.

Workers’ Compensation Insurance

Most states require workers’ compensation insurance for staffing companies to cover employees’ medical bills and lost wages if they suffer work-related illnesses or injuries. Depending on state law, business owners are required to purchase coverage or buy it from a state fund when they hire staff. Some states require coverage for even one employee.

Staffing agencies that place workers in permanent positions only have to get workers’ compensation for their in-house employees. Temporary staffing agencies need coverage for both in-house employees and workers they place with clients.

Commercial Crime Insurance

Crime insurance covers financial and property losses due to illegal activities such as forgery, computer fraud, and theft, whether they are committed by an outside actor or an employee. Most policies cover the funds and property of the policyholder, so temporary staffing agencies need an endorsement for items owned by clients.

Situations that may trigger crime insurance include:

• A temporary worker accused of stealing inventory from a retail client
• Your bookkeeper committing check fraud
• A burglar stealing money from your agency

Commercial property policies typically exclude coverage for stolen money or securities, and they also don’t cover employee dishonesty. This makes commercial crime insurance an important policy for any business, but especially for temporary staffing agencies.

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, protects your staffing agency in lawsuits over your professional services. For example, if a client accuses you of sending an underqualified candidate who then makes errors that cost the client money, professional liability insurance pays for your legal fees.

Other examples of claims typically covered by professional liability insurance include:

• Errors: Costing an applicant a job by sending them to the wrong interview
• Omissions: Failing to perform background checks
• Misleading statements: Misrepresenting a workers’ qualifications to get them a job

Some insurers combine professional and general liability coverage in a single policy for staffing agencies. This may be a way to save money, but owners should review the coverage with an agent to ensure it’s sufficient.

Additional Staffing Agency Insurance Policies

The five staffing agency insurance policies listed above are the ones most agencies need. However, many owners have operations or supply workers in industries that require additional staffing insurance.

A few examples of other staffing insurance policies agency owners may need include:

Cyber Liability Insurance

Cyber liability insurance covers costs associated with data breaches and cyber attacks, such as client notification, credit monitoring, and legal fees. Most agencies have some cyber liability exposures, if only because any employee can accidentally respond to a phishing email. However, IT staffing agencies may have the greatest concern.

Commercial Auto Insurance

Staffing agencies with business-owned cars most likely need commercial auto insurance. Most states require business owners have at least a minimum amount of liability coverage in case they cause damage and injuries to other people, but owners can also buy coverage that pays for their damages and injuries. They can also get hired and non-owned auto liability insurance for the vehicles they hire, rent, or borrow for business.

Computers & Media Coverage

Computers and media coverage, also called electronic data processing coverage, helps pay to restore or replace lost digital data when your agency’s computers or network are damaged by certain perils, including theft, vandalism, and malware. Some policies also cover repairs to software and hardware. Commercial property provides limited coverage for these items.

Staffing Agency Insurance Costs

Staffing agency insurance costs depend in part on the number of policies and the amount of coverage selected. Another important factor is the industries they serve. Temp agencies that supply workers in manufacturing or construction will most likely pay more for their general liability and workers’ comp than an agency that only places clerical workers.

Staffing Agency Insurance Costs & Deductibles by Insurance Type

*General liability insurance does not usually require a deductible, but business owners may request one to lower their premiums.

Policies, coverage amounts, and industries aren’t the only things insurers look at when they calculate staffing agency insurance costs. Other business characteristics and policy selection also come into play.

Some other factors insurers consider when determining premium include:

• Deductibles: A deductible is the amount a policyholder is responsible for in a claim. Selecting a higher deductible usually results in a lower premium.
• Claims history: Multiple claims in a short time can make a business look risky to an insurer, so they typically increase costs accordingly.
• Revenue: Insurers often charge staffing agencies with more revenue higher premiums because those agencies may have an increased chance of more expensive lawsuits.
• Employees: More staff means a greater risk of employee theft and injury as well as additional opportunities for client interactions to go badly. As a result, larger firms often have higher premiums for workers’ comp, general liability, and commercial crime.

Workers’ Compensation Insurance Costs for Staffing Companies

Nearly every staffing agency needs workers’ compensation insurance for their office employees. Coverage is required in all but Texas to pay for injured employees’ medical bills and lost wages. However, temporary staffing agencies also need coverage for workers placed in other businesses, and that adds to their overall staffing insurance costs.

The cost of workers’ compensation insurance for staffing companies is based on each employee’s job risk, the agency’s payroll, and its claims history. As a result, employers often pay more for workers’ compensation for employees in high risk jobs. For instance, workers’ comp costs for residential construction workers typically range between $2.82 and $35.95 per $100 of payroll, while clerical workers often cost 8 cents to $1.48 for every $100 of payroll.

Tips on Getting Staffing Agency Insurance

Getting staffing agency insurance is essential for your business’ success, but it’s seldom as simple as selecting policies and paying your premium. There are a few things you can do to make sure you’re buying quality coverage at a fair price.

These three tips can help you get staffing insurance:

1. Work With an Agent Who Knows the Industry

Agency owners should work with insurance agents who understand the staffing industry. In general, staffing agencies face a unique set of risks, but some can also have additional exposures based on their specific operations. An insurance agent with industry experience can more easily identify these exposures and recommend the appropriate staffing insurance to protect your business.

2. Compare Quotes From Multiple Carriers

“Staffing agencies’ second biggest overhead cost next to payroll is insurance,” according to Spark Talent Acquisition owner Aaron Opalewski. This makes it essential for agency owners to find affordable coverage that also fully protects their business, and the best way to do that is to compare multiple offers.

“It is important to choose the right insurance partner. Not only do you want them to quote you insurance at a favorable rate, but you are also looking for a coach—someone who can continue to teach you about and help you set a standard for best practices. My advice would be to shop for multiple brokers and ensure that those brokers are willing to educate you. They should go into detail on the carrier and what the pros and cons of working with that carrier may be. Picking the right one can set you up for success, keep your business competitive, and help to put processes in place that keep people safe at work.” – Aaron Opalewski, Founder & CEO, Spark Talent Acquisition Inc.

3. Classify Your Staffing Agency Correctly

In many situations, people use the terms staffing agency and employment agency to mean the same thing. For insurance, however, employment agencies make permanent placements. This distinction is important to make on your application because misclassification can impact coverage for the workers you place with business temporarily.

Staffing Insurance Frequently Asked Questions (FAQs)

We’ve tried to answer many of the questions a staffing agency owner might have about business insurance. However, the variety of operations in the industry may bring additional questions to mind, so we’ve answered a few additional ones here.

1. Are temporary employees independent contractors?

Agency-paid temps don’t pass the IRS test for independent contractors because they’re paid an hourly wage by the agency, don’t control their work situation, and typically receive benefits. This means temporary workers are eligible for unemployment, must be paid overtime, and should be covered by workers’ compensation insurance in states that require it.

2. Do staffing agencies have to provide healthcare?

Staffing agencies with over 50 full-time employees have to provide healthcare, according to the Affordable Care Act (ACA). Both the ACA and the IRS define full-time employees as individuals who average at least 30 hours per week over the course of a month, or at least 130 hours in a calendar month.

3. How can I reduce workers’ compensation insurance costs for my staffing company?

Safety training helps keep your employees safe while also reducing workers’ comp claims and lowering the cost of your staffing insurance. This is particularly important for temporary staffing agencies. While they may place workers with other companies, those temps are still staffing agency employees. As a result, the agency owner is responsible for their safety.

Bottom Line

Staffing agencies come in all sizes and serve almost every industry. That variety means finding the right insurance, payroll provider, and financing for staffing agencies isn’t easy. Agency owners need to identify their risks and partner with insurance professionals who understand the industry to ensure they get the coverage they need for their particular operations. A good insurance agent can also help keep their overall insurance costs down by helping owners identify best practices and set up safety programs when appropriate.

Another way to save on insurance for staffing companies costs is to compare quotes from multiple carriers. CoverWallet makes it easy to do just that through a single application that takes less than five minutes to complete and returns multiple offers within seconds.

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