Why Do Staffing Agencies Need Employment Liability Insurance?

Staff insurance

Staffing agencies have unique insurance needs resulting from the services that they provide to clients. Staff insurance should include Employment Practices Liability Insurance.

What Is Employment Practices Liability Insurance?

Employment Practices Liability Insurance provides coverage against claims brought by an applicant or worker alleging things like wrongful termination, sexual harassment and discrimination either on the part of the agency or the client where workers are placed. Although workers may be placed on a particular job site with a client, these workers are actually employed by the staffing agency for whom they work. This means that ultimately staffing agencies are responsible for the job safety and job conditions for their workers. For example, if a worker experiences harassment on a job, the agency that employs the worker is responsible, even though the client of the agency controls the conditions on the job site.

Who is Covered?

While this type of coverage is designed primarily to protect staffing agencies, typically policies will also cover both clients and workers of these agencies in the event that they are also named in a lawsuit.

Employment Practices Liability Insurance, then, is a type of staff insurance that protects against claims resulting from allegations of improper employment practices.