One of the most important policies you can offer for your staffing company clients is directors and officers liability insurance. Company officers hold valuable, demanding roles with high risks. The right liability coverage protects them from direct liability due to decisions they make while doing business. As an agent, you can help your staffing agency clients understand the value of this coverage and find the right policy to meet their needs. Below, we explore the basics of this coverage and offer examples of typical claims that your coverage protects against so you can help your clients get the coverage they need.
Why Directors and Officers Liability Insurance Is Important for Staffing Companies
The executives within a staffing company play vital roles in decision-making and day-to-day operations. The nature of those positions leaves many officers and directors exposed to liability risks from the actions and decisions as part of the job. With the right D&O liability policy, you can help your staffing clients with protection from devastating financial losses following a claim of wrongful or negligent actions or any errors or omissions in their professional capacity. These policies protect their personal assets and the company’s financial position.
Getting Your Clients the Best Directors & Officers Liability Coverage
Providing coverage for your staffing clients means careful consideration of risk factors and their coverage needs. Start with an evaluation of their risk factors. The industry the business operates in, its size, and any inherent risks for its typical staffing placements all factor into the assessment.
Once you determine the level of risk for the business, you can reach out to some carriers with D&O policies to find the coverage that meets their unique needs. You might need a policy that includes employment practices liability, business entity coverage, and fiduciary liability.
Look for a policy that protects each officer’s personal assets and the company’s. Additionally, ensure your clients have sufficient coverage with adequate coverage limits and affordable deductibles. To determine coverage, you may need to assess the company’s market value and recorded revenues.
Your chosen policy should come from a carrier offering proactive claims management. The more timely and efficient they are with claims, the better it is for the company. Once you establish a policy, review it with your clients regularly to ensure that you continue to meet their changing needs.
Examples of Directors and Officers Liability Claims in Staffing Companies
Ensuring adequate protection also means understanding the most common claims your clients might face. For example, staffing companies risk claims of fiduciary duty breaches if the company’s officers invest business funds irresponsibly or without due diligence and wind up costing the business money.
Employment practices liability is also a risk, especially with the turnover staffing agencies often experience. Discrimination and wrongful termination are common claims that these policies cover.
Financial misrepresentation, including deliberate inflation of financial reporting to generate investments, may also lead to a liability claim. Shareholders may file claims against the CFO and others participating in these actions.
The Value of Directors and Officers Liability Insurance
Staffing agencies need proactive risk management, including liability coverage for their directors and officers. Protect your clients from liability risks associated with their business decisions with comprehensive directors and officers liability coverage.
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 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.