The staffing industry is unique in so many ways and adequately insuring risk is no exception. Many staffing companies are working with insurance carriers or brokers who do not specialize in the staffing industry, and we often find key areas of exposure not addressed correctly or addressed at all. Below is a list of some of the most common coverage gaps that we find.
Property in your care custody or control – staffing firms are consistently providing employees to client companies, who as part of their daily job requirements have access to the client’s property. One of the most common industry examples is damaging your client’s forklift. This can be found in the general liability or property policy when structured correctly but is a coverage not always included in standard insurance policies sold by an inexperienced staffing broker.
Theft of your client’s goods or money – since the nature of the industry is providing employees to a third party you might assume if you purchase crime coverage, that you would have this protection. That could be a bad assumption as the standard crime policy generally covers theft from your company not theft of your clients’ goods or money.
Your client inappropriately getting named in an employment practices suit– the employer is responsible for employment-related acts. Sometimes your employees receive inappropriate legal advice and they try to name your client in a suit. Your client very easily may look at you contractually or just as an expectation of doing business, and ask you to defend them to get out of a lawsuit. Your Employment Practices Liability policy can only respond as structured, so it needs to be structured for the particular needs of the staffing industry.
Your client contractually asking you to indemnify them for a data breach caused by one of your employees– not all cyber liability policies are created equal! It’s possible that your policy may respond to this exposure but never assume you purchased the protection appropriately as the majority of coverage forms do not automatically cover this exposure.
You may already be contractually required to defend and/or indemnify your clients on all of the above exposures. If you are not, get ready because it’s coming.
These items are all items that are routinely pointed out by a qualified broker with staffing experience in their contract review on behalf of their staffing clients. Equally important are the solutions that a specialized service team can provide to help staffing clients address these exposures if they don’t currently purchase the necessary insurance. Specialists possess industry-specific knowledge and work with carrier partners to ensure access to the best coverage solutions. If you are working with an insurance carrier or broker who does not specialize in the industry, be careful as this is just a partial list. There are many coverage pitfalls where an assumption of coverage leads to a reduction in the bottom line of your business.