Staffing agencies are unique in that they offer flexibility to an employer that is grappling with temporarily filling positions for workers on leave, either on vacation, sick, or simply dealing with personnel needs. There are certain advantages to outsourcing labor, and some companies have found that they appreciate having the ability to quickly add viable candidates to assist with their production, or simply bring in an employee with capable credentials for a short-term contract. Employers will often use temporary staffing as a bridge to providing individuals with full time employment.
The staffing industry and related insurance concerns
Both companies that provide staffing services and Professional Employment Organizations (PEOs) are rather large industries, and there are a number of them operating throughout the US that may not receive the type of insurance information and expertise that these employment companies are sorely in need of in order to help mitigate risk. Agencies that can provide the types of products and services to help in dealing with these types of issues can greatly enhance these business models, thereby reducing their losses and helping these businesses succeed.
There are a variety of risks and exposures associated with running an enterprise of this type and unfortunately quite a few insurance carriers still experience difficulties when it comes to providing adequate employment agency insurance solutions to some of these entities. A company that provides workers to another company has increased exposures and some uncertainties when it comes to coverage concerns.
The reason for the concerns and confusion is understandable. Underwriters often want to know specifics about the types of jobs and the work being performed in order to determine just what the coverage needs are for PEOs and staffing agencies. For example, what will the employee be doing at the job site? How long will they be employed there? Do they have the proper training for the job and are there any safety issues pertaining to the job site?
This sort of ambiguity requires agents and insurance carriers with some knowledge about the ins and outs of this dynamic industry in order to better serve them. Someone who can perhaps suggest a risk management program tailored to fit the needs of this business sector.