As the saying goes “you get what you pay for.” Sometimes, the reason for a cheaper insurance quote is because it isn’t adequate. Not all insurance policies are created equal and a General Liability (GL) policy, for example, from one insurance company may not offer the same coverage purchased from another insurance company. Insurance companies tailor their policy coverage forms to meet the specific needs of different industries, as each industry has its own unique insurance loss exposures.
As a staffing firm, you carry the responsibility of any negligence caused by your temporary employees. Depending on the cause of loss and the type of damage done (property damage, financial loss, theft, etc.), if your insurance policies are not properly modified, you could be left with a large bill in the event of a claim.
Below are three common examples specific to the staffing industry that may not cover claims if your insurance policies were not properly endorsed:
The standard issued GL policy excludes temp employees from the definition of employee. It also excludes property in your care, custody, and control. If your temp employee accidentally damages a wall while using a forklift and your policy was not written specific for a temp staffing firm, the property damage suit brought by your client to cover wall repairs would not be covered by your policy.
The majority of professional liability policies will only cover your services provided as a temporary staffing firm (employee recruitment, running of background checks, finding of qualified candidates, etc.). However, what if a temp employee, working as a CPA, inaccurately files someone else’s taxes, causing financial loss? Without the vicarious liability policy extension and amending the standard placement exclusions, you would not have coverage for this claim.
Employment practices liability (EPLI) claims tend to rise during times of economic, political, and cultural uncertainty. For the staffing industry, this could be detrimental to your bottom line. Most EPLI policies available in the marketplace will not cover claims brought by a temp employee. Additionally, what if an employee or applicant sues your firm for failure to hire? Unless your policy amends the definition of who is an employee, you won’t have coverage for wrongful termination, failure to promote, sexual harassment, and other related claims brought on by temp employees or applicants.
These are just a few examples among many. There’s no need to stay up late reading your insurance policy to make sure you have proper insurance coverage. The key is to find an insurance broker who specializes in your industry. At Marsh McLennan Agency, we do a full 360 review of your operations, advise you on necessary insurance coverages, and work with our insurance carrier partners to customize each policy’s coverage form to meet your specific needs.
If you have any questions, please contact a Marsh McLennan Agency advisor.