Staffing agencies face many risks, from third-party injuries to employment claims and even large settlements. The problem? Sometimes, standard liability coverage for staffing insurance isn’t enough.
As an insurance agent, it’s your responsibility to help your staffing clients evaluate their coverage needs and ensure they have the protection necessary to safeguard their businesses.
Understanding Umbrella Liability Insurance
Umbrella liability insurance provides an extra layer of protection when primary insurance policies, like general liability, are maxed out. Think of it as a backup plan that starts once your staffing agency clients exhaust their initial coverage’s limits.
This type of insurance is designed to cover large claims that could otherwise financially devastate a staffing agency, providing peace of mind for clients who want to be prepared for worst-case scenarios.
When Do Staffing Agencies Need Umbrella Liability?
Staffing agencies face numerous risks due to the nature of their business, making umbrella liability insurance essential. But when does it actually kick in? Here are some typical scenarios.
Third-Party Injuries
If an agency places workers in hazardous environments, they could face lawsuits for third-party injuries. For example, if a temporary worker causes damage at a client’s workplace, the resulting claim might exceed the agency’s general liability limits.
Employment Claims
Staffing firms are also susceptible to employment-related claims such as wrongful termination, harassment, or discrimination. In fact, 61% of U.S. workers have seen or faced workplace discrimination at some point. If these claims lead to large settlements, the firm’s standard employment practices liability insurance may not be enough.
Large Settlements
Umbrella insurance also becomes crucial when settlements surpass the settlements of the primary insurance policies. Having the right umbrella coverage ensures that staffing agencies aren’t left covering the excess from their own pockets.
The Benefits of Adequate Staffing Umbrella Liability Insurance
For staffing firms, the financial protection that comes with umbrella liability insurance is invaluable. It offers an extra buffer against unexpected, high-cost claims that could otherwise jeopardize the agency’s operations.
Additionally, umbrella insurance provides peace of mind. Knowing there’s a safety net in place allows staffing firms to focus on their core business operations without the constant fear of potentially devastating lawsuits.
Assessing the Right Coverage Amount
Determining the right umbrella coverage level for staffing firms requires a tailored approach. As an insurance agent, here are a few factors to consider when assessing a client’s needs.
- Agency size: Larger staffing firms with more employees and a broader client base may require higher coverage limits to account for various risks.
- Client industries: Consider the industries the agency serves. Agencies placing workers in high-risk sectors like construction or healthcare will likely need more extensive coverage.
- Past claim history: Having a claim history can indicate a higher likelihood of future incidents. Reviewing this data can help guide recommendations for appropriate coverage levels.
By carefully evaluating these factors, you can help your staffing clients secure the right umbrella liability insurance to fully protect their business.
Guiding Staffing Firms to Comprehensive Insurance Coverage
Staffing agencies face complex risks that require more than just basic insurance coverage.
As an insurance agent, your proactive approach in assessing and securing adequate umbrella liability coverage is crucial to ensuring your clients’ peace of mind.
Get in touch with us today to learn how we can help you provide the right coverage solutions for your staffing agency clients.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and are committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.