Staffing firms provide a valuable service to the economy by providing temporary employees to businesses that need short-term staff for one reason or another. Staffing firms also make it possible for potential employers to hire staff on a short-term basis in order to determine whether they would be compatible for long-term positions in their company. Because they are constantly involved in the hiring and contracting process, it is important for staffing firms to purchase employment agency insurance.
Due to the nature of their business and the number of employees they contract to other businesses, staffing firms face unique risks. They simply cannot predict when one of their employees will file a claim against them for harassment, wrongful termination or discrimination.
How Staffing Firms Can Protect Themselves
In order to protect their financial interests, staffing firms should be careful to purchase employment agency insurance coverage and always keep coverage in place. The more employees they hire and contract to other companies, the higher their risk of facing a lawsuit. Even staffing agencies that take every necessary precaution in regard to their employees could still face a variety of allegations. These allegations could easily drain their financial resources in the absence of adequate insurance coverage.
By purchasing employment agency insurance coverage that is appropriate for their risks and business size, staffing firms can protect themselves from financial ruin in the event of an employee lawsuit.