Staffing firms face significant financial risks when workplace accidents result in wrongful death lawsuits. While primary policies like general liability and workers’ compensation provide coverage, they often fall short when claims reach millions of dollars.
Staffing umbrella liability insurance acts as a critical safeguard, ensuring staffing agencies have adequate protection against catastrophic financial losses.
Understanding Staffing Firms’ Liability Risks
Wrongful death lawsuits can arise from various workplace incidents, leaving staffing firms vulnerable to substantial legal and settlement costs. Below are some common scenarios.
- Workplace injuries: With workers dying every 99 minutes from work-related injuries in 2023, temporary employees working in hazardous environments present unique risks. Workplace-related accidents or fatalities may lead to claims against both the staffing firm and the client company.
- Medical negligence: Staffing agencies placing healthcare workers can face liability if an employee’s actions contribute to a patient’s wrongful death.
- Auto-related fatalities: If a temporary worker causes a fatal accident while performing job-related duties, the staffing firm may be named in the lawsuit.
Even if a worker is placed at a third-party job site, the staffing agency can still be held liable, making umbrella liability coverage essential.
Why Primary Insurance Isn’t Enough
Many staffing firms assume their general liability or workers’ compensation policies provide sufficient coverage for wrongful death claims. However, these policies have limitations.
- Coverage caps: General liability and workers’ compensation policies have set limits, which may not cover high-value claims, especially when legal fees, settlements, and jury awards escalate.
- Excessive legal costs: Defending against a wrongful death lawsuit can cost millions, quickly exhausting primary policy limits and leaving the staffing firm financially exposed.
- Potential business disruption: If a firm cannot cover claim-related expenses, it may face bankruptcy or reputational damage, jeopardizing future business operations.
How Staffing Umbrella Liability Insurance Works
Staffing umbrella liability insurance provides an additional layer of financial protection by extending coverage beyond primary insurance policies. Here are some instances when this coverage becomes essential.
- Primary policy limits are reached: If a wrongful death settlement or jury award exceeds general liability or workers’ compensation coverage, umbrella insurance steps in to cover the remaining costs.
- Multiple claims emerge: Staffing firms managing several liability claims simultaneously can deplete primary insurance faster, making umbrella coverage crucial.
- Unexpected legal risks arise: Cases involving negligence, third-party liability, or contractual disputes can result in unforeseen financial exposure.
For example, if a temporary worker suffers a fatal accident on a construction site and the client company’s insurance does not fully cover the claim, the staffing firm’s umbrella liability insurance can absorb the excess costs. With umbrella liability insurance, the agency can prevent severe financial losses.
Key Policy Considerations for Insurance Agents
Insurance agents should consider the following measures when recommending staffing umbrella liability insurance.
Assess Industry-Specific Risks
Different staffing sectors face unique liability exposures. It’s essential to customize coverage based on industry-specific challenges.
Determine Appropriate Policy Limits
Coverage limits should align with the firm’s size, contractual obligations, and industry standards. Properly structured coverage ensures staffing firms can handle high-value settlements without risking financial instability.
Review Exclusions and Endorsements for Staffing Umbrella Liability Insurance
Insurance agents should guide their clients in identifying potential coverage gaps and securing endorsements that address industry-specific risks. Properly structured policies help mitigate financial exposure and strengthen overall liability protection.
Protecting Staffing Firms With Umbrella Liability Insurance
Wrongful death lawsuits can have devastating financial consequences for staffing firms. With staffing umbrella liability insurance, agencies can safeguard their financial stability and continue operations without the looming threat of multimillion-dollar claims.
Insurance agents play a critical role in ensuring staffing clients have comprehensive coverage tailored to their risk profiles. Contact World Wide Specialty today to explore staffing umbrella liability insurance solutions that provide maximum protection against high-value claims.
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.