Temp and staffing agencies are essential in bridging the gap between employers and skilled professionals for short-term positions. However, the challenge of sourcing high-quality candidates is just one of the many hurdles these agencies face. Like any other business, temp agencies are exposed to various risks that could lead to significant financial setbacks. For instance, a single incident of property damage or a third-party bodily injury claim caused by a temporary worker can be devastating to a temp or staffing agency. This is where temp agency insurance becomes crucial.
At ALIGNED, we understand the unique challenges that temp agencies encounter. Our specialized insurance policies are designed to provide comprehensive coverage tailored to your specific needs. Whether it’s professional liability, commercial general liability, cyber liability, or commercial property insurance and/or for bonds we are committed to ensuring that your temp agency is well-protected.
Temp agency insurance is not just a safety net; it’s a strategic investment in the longevity and stability of your business. By securing the right insurance coverage, you can focus on what you do best—connecting employers with the best talent for their needs—while we handle the risks. ALIGNED is dedicated to matching temp agencies with the right coverage, offering peace of mind and financial security from the 70+ top Canadian insurance companies we work with.
In today’s competitive market, having robust temp agency insurance is more important than ever. It safeguards your business against unforeseen events and helps maintain your reputation as a reliable and professional service provider. Don’t let potential risks hinder your agency’s growth. Trust ALIGNED to provide the insurance solutions that will keep your business thriving.
Temp agency insurance explained
Temp agency insurance is a type of commercial insurance aimed at temporary staffing, recruiting, or employment agencies. Insurance coverage for temp agencies is specially designed to protect your agency from everyday risks, such as lawsuits alleging wrongdoing or third-party injury, damage to your property or its business contents, cyberattacks, and more.
Who is temp agency insurance intended for?
Temp agency insurance is made with temporary staffing agencies in mind. However, it is also applicable to full-time staffing agencies, employment agencies, recruiters and recruitment agencies, human resources management firms, and more.
Temp agency risks
As the owner of a temp agency, you are constantly navigating a landscape filled with potential risks. One of the most significant challenges is ensuring the integrity of the professionals you hire. An employee might falsify their qualifications, claiming expertise they do not possess. This deception can lead to lawsuits for failure to deliver promised services or allegations of negligence, putting your agency’s reputation and finances at risk.
Beyond these liability concerns, temp agencies also face a myriad of non-liability-related risks. Imagine a scenario where a thief breaks into your office during the night, making off with valuable equipment like computers and other essential technology. Such an incident not only results in immediate financial loss but also disrupts your operations, potentially affecting your ability to serve clients effectively.
Cybersecurity threats are another critical concern. Hackers can target your agency, seeking to steal confidential data about your clients and employees. A data breach can have severe repercussions, including legal penalties, loss of client trust, and significant financial costs associated with mitigating the breach and restoring your systems.
Despite your best efforts to safeguard your business, accidents and unforeseen events can and do happen. This is why having comprehensive temp agency insurance is crucial. Without it, you would be responsible for covering the costs of these incidents out of pocket, which could lead to serious financial strain or even jeopardize the future of your business.
Temp agency insurance provides a safety net, offering protection against a wide range of risks. From professional liability and commercial general liability to cyber liability and commercial property insurance, the right coverage ensures that your agency can weather any storm. By investing in robust insurance policies, you can focus on growing your business and connecting employers with top-tier talent, knowing that you are protected against the unexpected.
Insurance coverage recommendations for temp agencies
The following coverage types are generally recommended for and available to temp agencies:
- Professional liability coverage: Professional liability coverage, also known as errors and omissions insurance, protects your temp agency against the cost of a lawsuit alleging error, misconduct, misrepresentation, or failure to deliver a service as promised. This could be especially useful if your temp agency is ever accused of negligence, wrongdoing, or a breach of confidentiality.
- Commercial general liability insurance: Commercial general liability insurance is important for all businesses, including temp agencies, as it can protect them against claims of third-party bodily injury or property damage. For example, if a client visits your office and slips and falls on a wet floor in the lobby, they might sue you. Thankfully, with commercial general liability insurance, your insurance company may cover any legal fees and medical expenses up to the policy limit.
- Commercial property insurance: Commercial property insurance protects your temp agency office space and any business-related contents (such as computers or furniture) from damage caused by an insured peril. It is up to each policyholder to decide which perils to include with their policies. Perils may range from fire and theft to water damage, windstorms, vandalism, and more.
- Cyber liability insurance: Cyber liability insurance can help protect your temp agency from a cyberattack or data breach. This type of insurance will cover the cost of damages and legal fees if your agency falls victim to a hack. Other costs that may be covered include credit monitoring, client notification, restoration fees, etc.
- Employee theft insurance: Employee theft insurance is another type of coverage that might be worthwhile for temp agencies. Experts acknowledge that employee theft is one of the fastest-growing issues facing companies. Plus, employee theft can have a range of consequences, including both personal and professional. Luckily, employee theft insurance is designed to reimburse businesses, such as temp agencies, for the loss of money, securities, or inventory resulting from criminal activities.
- Bonds: Many staffing and temp agencies are required to carry a bond which is an area ALIGNED Insurance has the experience and expertise to assist with.
Common claims scenarios
- Scenario #1: An employee your temp agency hired and placed at a client’s business is fired after a couple of weeks. The employee then files a wrongful dismissal lawsuit against your agency and your agency’s client. If such a situation occurred and you had temp agency insurance that included professional liability coverage, your insurance provider may cover the cost of any necessary legal fees (e.g. defence costs, settlement costs, etc.).
- Scenario #2: A prospective temp worker arrives at your office for an interview but trips over a cord in your lobby and injures themselves. They subsequently sue you for third-party bodily injury. In this scenario, your commercial general liability insurance would come into play and may help cover the costs of a lawsuit as well as any medical expenses up to the policy limit.
Insights 101 | The cost of temp agency insurance explained
The cost of temp agency insurance varies because insurance companies calculate rates based on a wide variety of factors. Factors that can influence the cost of temp agency insurance include everything from the services your temp agency offers to its size and location. If you’re considering buying temp agency insurance, we recommend obtaining a quote from a trusted brokerage like ALIGNED. One of our insurance experts would be happy to assess your circumstances and provide you with an accurate and competitive quote. In the meantime, we have put together a list of some of the most important factors impacting temp agency insurance premiums. Check them out below.
- The location of your temp agency
- The services that your temp agency offers
- The number of employees your temp agency has
- Your insurance claims history
- Your certifications, training, and experience
- Your temp agency’s annual and projected gross revenue
- The coverage types, policy limits, and policy deductibles you choose
How can I purchase temp agency insurance?
There are two main methods of purchasing temp agency insurance. It can be purchased directly through an insurance provider or an insurance broker. Many temp agency owners choose to buy insurance with the help of a broker owing to the benefits of doing so. For example, insurance brokers are knowledgeable about a wide range of products, helping you to find the best one for your business. Plus, brokers do the work for you, obtaining and comparing quotes on your behalf. That said, it’s important to note that insurance brokers do not set premiums. These are determined by insurance companies. However, an insurance broker can help you shop around for insurance and provide advice on how to modify a policy or file a claim in the future.
Does temp agency insurance cover the employees they hire to work at a client’s company?
Sometimes. Since temp agencies are responsible for hiring and paying each temporary worker, rather than paying the client, these workers are often considered employees of the agency. However, whether these employees are covered by your temp agency policy ultimately depends on your provider and unique policy terms. We recommend speaking with an insurance broker about your coverage needs and asking for clarification on whether your policy covers your employees.
3 reasons to buy temp agency insurance from an insurance broker
Working with an insurance broker comes with so many benefits. It’s no wonder that many temp agency owners choose to buy commercial insurance with the help of a broker rather than directly through a provider. The top three reasons to buy temp agency insurance from an ALIGNED insurance broker are below.
Brokers have unparalleled resources and expertise
Brokers are insurance experts who are eager to share their resources and expertise to find you a great policy. For example, every broker at ALIGNED is fully licensed and has years of experience matching customers with customized commercial insurance solutions.
Brokers work for you, not the insurance companies
Brokers work independently of insurance companies, which allows them to prioritize the needs of their clients. Here at BrokerLink, we always put the customers’ needs first, taking the time to understand the exact type of coverage they’re looking for.
Brokers do the heavy lifting
Lastly, ALIGNED insurance brokers do all the heavy lifting. This means that we take the time to contact top insurance companies and obtain quotes. From there, we compare policies and unlock discounts to find you the most comprehensive coverage at a competitive rate. While we work behind the scenes, you can sit back and relax.
Get ALIGNED with personalized insurance for your temp agency
The risks faced by temp agency owners are multifaceted and ever-present. Ensuring that you have the right insurance coverage is not just a precaution—it’s a strategic move to secure the longevity and stability of your business. Trust ALIGNED to help you find the specialized insurance policies that will keep your temp agency protected and thriving.Still, have questions about temporary staffing agency insurance? Get in touch with ALIGNED today. One of our knowledgeable and friendly insurance brokers will be pleased to answer your questions, provide you with a quote, and explain the commercial insurance coverage options available to temp agencies. You can also get started now by clicking here for a free quote.
