One of the larger exposures facing most business owners is a claim resulting from employment-related exposures. For staffing agencies, the risk is sometimes greater due to the fact that it can stem from the placement of their employees in positions under the direction and control of their clients. Employment practices liability coverage is important for anyone in the staffing industry to have as part of his or her overall staff insurance coverage. Make sure to include this policy for any concerns that your agency may have, one that includes temp employees under the definition of employees covered by the policy.
Clients are more comfortable when your agency carries EPL insurance
As a staffing agency, your primary focus is to select candidates that are best suited for the type of work performed by your client’s companies. Because there is such a complex relationship between your agency, the temp employees you enlist, and those client companies, typically, both the staffing agency and the client company can be sued jointly when an employment-related lawsuit is filed.
Your contract with clients may require that your EPL policy defend or cover damages resulting from employment-related lawsuits made against them by your temp staffers. In order to cover your agency against this type of exposure, your EPL policy will need to be specifically endorsed or extended for this arrangement.
While many suits are found to be groundless, for example, disgruntled employees, many of whom have no legitimate claim, may accuse managers, co-workers, or staff from either company of discrimination, harassment, or being denied a job or position that they felt they were qualified for. The fact remains that your having to defend against these types of claims can be very costly, and also time-consuming as well.
Employment law is often complex and varies depending on jurisdiction. Lawyers should be well versed in every aspect of EPL law and be able to prove that a case actually has no merit. EPL coverage is a very important component of staff insurance, because it covers both the cost of defense and any resulting damages from a covered claim.