Staffing agencies need insurance that covers their assets and protects them 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 annually. Professional liability is another important coverage for a staffing agency since it covers things like failure to meet a contractual obligation, and prices can run from $670 to $800 annually.
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 Simply Business is a great way to find coverage. Simply Business works with over a dozen top providers to help you compare costs and buy insurance online.
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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 finds placement for 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 |
Commercial Property | $700 to $3,000 | $50,000 | $1,000 |
Professional Liability | $670 to $800 | $1 million per occurrence, $1 million aggregate | $0 |
Employment Practices Liability | $1,080 to $3,200 | $300,000 | $500 |
Nearly every state requires workers’ compensation for businesses with one or more employees. As such, you will need to look into your state regulations to determine if your business needs it. The cost for workers’ compensation 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.
Insurers consider other factors when determining premiums, including:
- Deductibles: A deductible is like a co-pay—it is 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 is a claim.
- Limits: Many insurers will offer different levels of coverage that come down to the total limit: $500,000, $1,000,000, or $2,000,000 per policy. Each limit will come with a different price tag.
- Industry: The type of industry that your agency works with will bear with it a different level of risk exposure, which will be reflected in the premium.
- 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.
Read our guide on the ways to save money on business insurance for tips on how to get affordable yet quality coverage.
Types of Insurance for Staffing Agencies
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
The right policies for your business will depend largely on your business structure. General liability insurance 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. If you are looking to save money, check out our guide to the cheapest general liability insurance companies.
Commercial Property
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.
To get an idea of the differences between the two policies, check out our comparison of BOP vs general liability.
Professional Liability Insurance
Beyond general liability and commercial property, professional liability is very important to consider for your agency. Often referred to as errors and commissions (E&O) insurance, this protects your business if you are 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.
See our guide to the best professional liability insurance companies for our recommendations.
Employment Practices Liability
Employment Practices Liability Insurance (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 they are pregnant during the interview process, this could open your agency up to a lawsuit. To avoid this, make sure the questions and assessments are not discriminatory.
Pro tip: You may be interested in our article on common illegal interview questions to avoid and our in-depth guide on employment laws that you need to keep up with.
Workers’ Compensation
Workers’ compensation insurance is a required coverage in nearly every state for companies with employees. If an employee gets injured or becomes ill because of their employment, workers’ comp will help with replacing their wage and medical bills, and usually provide a return-to-work program for the employee.
Any staffing agency with employees will need to look into workers’ comp. However, every state has a different threshold for when the coverage is required and what type of employee—including temporary workers—qualifies for coverage. Check with your local state office to see if your agency is required to offer workers’ comp for temporary employees.
How to Get Insurance for Staffing Agencies
Finding staffing insurance can be tricky due to the complexity of the industry and the potential for overlapping employment. However, that doesn’t mean it is impossible or unaffordable to find the right coverage for your agency.
- Carrier: A provider, or insurance carrier, is what underwrites the policy, services the policy, and handles any claims when there is a loss. Many providers employ agents whom you can contact to get a quote. Simultaneously, many also will work directly with the consumer to help provide coverage. Many will provide a discount for customers working directly with the carrier.
- Broker: Brokers work independently of one specific carrier and instead will work with multiple carriers. This is a great option for finding insurance because the broker will be working for you rather than the carrier and has access to a large insurance marketplace.
To help you decide, refer to our insurance carrier vs broker comparison.
Best Staffing Agency Insurance Companies
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 companies here represent either specialty insurers or brokers that can work with multiple carriers to find coverage.
- Simply Business: Overall best
- Hiscox: Best for agencies working with white-collar workers
- Bankers Insurance: Best for agencies in manufacturing and construction placement
- Philadelphia Insurance Companies (Phly): Best for EPLI for temporary employees
- World Wide Specialty: Best for agencies that are American Staffing Association (ASA) members
Simply Business: Overall Best Staffing Agency Insurance Company
Digital broker Simply Business is the best provider of staffing agency insurance because it combines the ability to manage your policy with the convenience of comparison shopping for insurance. Its insurance is offered nationwide and ranges from general and professional liability to a BOP and workers’ comp. Its target business is smaller operations with five or fewer employees.
For more on the broker, read our review of Simply Business. However, if you would prefer to work directly with a provider, a company like Hiscox serves the policy and handles claims.
Get a Quote From Simply Business
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 for you. Its specific appetite is targeted toward more white-collar, clerical jobs, like lawyers, architects, and engineers. Our review of Hiscox covers the provider’s coverages, policyholder services, costs, and more.
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 is an independent agency, it can find a carrier that will insure your business and provide the coverage you need.
Get a Quote From Bankers Insurance
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.
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 is 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.
Get a Quote From World Wide Specialty
Frequently Asked Questions (FAQs)
Staffing agency insurance is a policy or combination of policies that offer protection for your business by covering your physical property and protecting your financial assets from claims of negligence. The most common policy is general liability, followed by professional liability and commercial property.
There are no specific requirements for staffing agency insurance. However, most states do require some level of workers’ compensation insurance for all businesses. Additionally, companies you contract with may require insurance and request proof of insurance or a certificate of liability showing your staffing agency is properly insured.
A general liability policy with $2 million in aggregate coverage can cost anywhere from $250 to $1,000 annually. Commercial property with a limit of $50,000 can be as low as $700 to $3,000.
Professional liability, unlike general liability, is more specific to liability from errors and omissions from services rendered (specifically, if those errors caused another party financial harm). This can include failure to meet the requirements of a contract or a photographer not taking the specific shots discussed and agreed upon with a couple prior to a wedding.
Most commercial general liability policies carry personal injury and advertising coverage. The limit for this is typically $1 million dollars. It is important to always review what coverages are included with the policy.
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.
Simply Business can help find the right company and coverage for your staffing agency. It can do this online—and in just minutes, you can have insurance for your business and be covered for the year.
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