Why Do Staffing Agencies Need Professional Liability Insurance?

Because staffing agencies make placements every day, staffing agencies require Professional Liability Insurance to cover them against losses resulting from placements. This type of staff insurance covers three major areas.

Placement

Staffing agencies need coverage protecting them against losses resulting from placement decisions. This includes claims resulting from providing unqualified workers, improper testing and screening, failure to provide workers with a placement and even claims from workers regarding a lack of information about placements.

Services Provided

Staffing agencies require coverage against claims resulting from services besides placement offered to clients, such as consulting and payroll processing. If claims of errors are brought against staffing agencies, liability insurance is necessary.

Work Performed

Staffing agencies should be covered in the event of claims brought by clients regarding the work performed by workers who have been placed by the agency. In some cases, an appropriate placement is made, but the worker makes errors in the performance of the job resulting in losses for the client. Staffing agencies are responsible for the work and services performed by the workers that the agency places. Even a relatively small oversight—an administrative assistant neglecting to inform someone of a phone call—can result in large financial losses for the client. The agency that placed the worker is responsible for these kinds of losses and should carry Professional Liability Insurance to cover this sort of scenario.

Staffing agencies require appropriate staff insurance, including Professional Liability Insurance, to cover them against claims resulting from placing workers and the work that these perform.

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