Staffing Professional Liability Insurance

Staffing firms make all types of placements – from industrial to clerical, attorneys, architects, engineers, and programmers, to financial and healthcare. Regardless of what type of placement the staffing firm makes, they all need Professional Liability insurance. There are three main categories of exposures that staffing firms face: placement of exposure, actual work performed by the temporary worker and any additional service(s) the staffing firm is affording to their clients.

  • Placement.This involves failure to provide the appropriate workers to a contracting client and failure or improper screening of candidates . In addition, there is a much-often overlooked placement exposure that involves a worker bringing a lawsuit against the staffing firm for allegedly misrepresenting the company with which he or she was placed. Direct Hire, Executive Search and Recruitment, Retained Search, Temporary Placements and any staffing firm from an ASO (Administrative Service Organization) to PEO (Professional Service Organization) that makes any placements should have Professional Liability coverage, also called Errors and Omissions (E&O) Liability insurance.
  • Work Performed. This is the most recognized and understood exposure. This involves a contract worker who has the necessary background according to the staffing firm but makes mistakes that result in a financial loss for the client. The staffing firm is responsible for the job its employee performs and or doesn’t perform, (or performs improperly). Medical/Healthcare placements increase the staffing firm’s exposure to financial loss. In fact, the presence of a nurse alone is enough to draw him or her into a claim. Medical placements in emergency rooms and during surgical procedures have a higher risk profile and are most often part of any claim in those areas. Physical therapists may also be the subject of many claims, as they deal with frail patients. Attorney placements, financial placements, IT placements can all make mistakes on the job, as well. Temp placements are the employees of the staffing firm and are responsible for their mistakes. Claims from non-professional placements can be just as expensive as claims from professional placements. Industrial assembly line workers improperly doing their assigned function will affect the final product that can cause a loss.
  • Services Provided. These involve services the staffing firm provides to their clients above and beyond the placements, such as consulting activities for clients and on a greater scale the services provided by a PEO or an ASO. Any services provided to clients can result in mistakes, dissemination of improper information, failure to act or failure to advise, all of which can result in sizeable claim situations against the staffing firm.

It is important for staffing firms that make professional placements to secure Professional Liability insurance. In addition, be aware that staffing placements and services are often the subject of class action suits involving a large number of people bringing suit for the same mistake or failure to act.

PHLY'S Professional Liability Policy

Our Professional Liability policy protects staffing firms for legal actions alleging financial loss arising from the placement of and the services performed by contract workers – from administrative and blue collar to professionals, including but not limited to architects, engineers, accountants, attorneys, IT placements, medical professionals.

Highlights:

  • Individual Policy – separate limits
  • Additional Insured status available with the ability to remove Insured vs. Insured exclusion
  • Occurrence Form or optional Claims Made – both with defense outside the limits
  • Duty to Defend
  • Coverage can be written for staffing firms engaged exclusively in Healthcare placements (placement of doctors & dentists excluded)
  • Coverage for IT professionals includes actions arising out of copyright, trademark, or trade name
  • Coverage to PEO for services provided to clients
  • Coverage to PEO for defense of claims arising out of actions/activities of PEO workers
  • Coverage territory is worldwide for all named insureds domiciled in the USA

Submission Requirements: