Staffing Companies and Employment Agency Insurance

Employment Agency Insurance

The primary job of a staffing company is to develop relationships with employers and then place qualified individuals into any open positions that the employer has. This helps employers fill short-term and long-term positions and may also provide direct placement assistance for employers.


A staffing company can be one of the easiest businesses to start up. In general, they require fewer licenses and only need to address minimal requirements to get up and running. Once the licenses and requirements are met, including procuring employment agency insurance, they can begin to operate the business legally and place their applicants with its business clients.


Operations vary from one company to the next


Employment agencies may offer several different types of employment-related services or they may concentrate on just one industry. For instance, they may perform one or more of the following services:


  • Place a worker with a permanent position


  • Find a specific type of worker for a customer company


  • Provide employers with short-term or temporary help, or


  • Provide workers with job counseling


It is very important to make sure that the worker seeking employment, the employment operation, and the customer company seeking the worker understand fully the terms and conditions of the employment arrangement.


Serving many different industries can require specific licensing


While some staffing companies focus on labor positions, some staffing companies specialize in certain industries, such as nursing or construction. Some states require specific licenses in order to place employees. The city’s business development office or a representative thereof usually determines this. The office will provide specific information needed to obtain the additional licensing, if any is required.


Most states require businesses to maintain workers’ compensation insurance for its employees. Providing long-term placement services (meaning that the placed employee is a long-term employee of the staffing company) requires workers’ compensation coverage under the staffing agency.


Depending upon the type of staffing agency, workers compensation and/or professional liability can be the largest expenses as well as the biggest exposures. A well-defined general liability insurance policy, as well as a business insurance policy helps to protect the staffing company from liability and aids the company in meeting its legal requirements.


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