The Importance of Professional Liability Insurance

Your staffing agency is responsible for the employees you hire out to other businesses. Therefore, it is essential that you invest in staffing agency insurance, particularly a professional liability policy, which is designed to cover the losses of any mistakes that are made. There are three areas where staffing agencies could err.

1. Worker Errors

The most common liability for a staffing agency is a worker who, while qualified for the position, makes a mistake on the job that results in some sort of loss for the client. As the company who vouches for the worker, the staffing agency must be equipped to cover any loss that results from worker errors.

2. Placement Errors

When a client is promised a reliable worker, that is what he or she expects. Any failure to place a qualified employee as agreed can result in legal trouble. There are several placement errors that could be covered by staffing agency insurance:

  • Faulty screening or testing of employees
  • Placing unqualified workers
  • Failure to place workers at all

3. Service Errors

In addition to placing workers directly with the clients, the staffing agency might provide other services, such as consulting, human resources or payroll services. Bad advice or service that results in a loss to the client can come back to haunt you.

Professional liability can help offset the cost of mistakes that are made by workers themselves or with placements or services offered. It is an important part of your staffing agency insurance coverage.