Most states in America require employers to hold some kind of workers’ compensation insurance. There are some exceptions, but it is a good idea to hold workers comp insurance either way, especially if you are a staffing firm. Staffing agencies typically work with a wide variety of candidates and employers.
Agencies face unique risks because they don’t have as much control over their workforce. Not to mention, many of the employees placed with an agency work off-site. So, they don’t have control over their immediate safety beyond fielding the companies they work with. This means that there is an increased need to protect the agency, its clients, and the talent they work with, making it important for recruitment firms to obtain insurance. Below is a comprehensive guide to workers’ compensation insurance for staffing agencies.
What is Workers Compensation Insurance?
Workers comp insurance protects the employee and employer in the event of an accident in the workplace. In short, it helps cover medical costs and time off due to an injury that occurred at work. Employers are expected to pay into the insurance fund to protect employees in case they get hurt on the clock.
After a claim is submitted, the employer and insurance company have to verify that the injury happened at work. If the claim is rejected, a workers comp judge will take a second look. On top of paying for time off, rehab, and any injuries, workers’ compensation insurance may also make payments to family members of individuals killed on the job.
Importance of Workers Comp Insurance for Staffing Agencies
There are a number of different kinds of staffing agency insurance that firms need. Workers comp insurance for staffing agencies is one of the most important. While there is little a staffing agency can do to control conditions at off-site workplaces, they can be proactive about mitigating the potential risk to candidates and their business. It won’t eliminate the risk, but it can greatly reduce your firm’s exposure to potential risks.
For example, an agency may hold workers comp insurance to cover themselves in the event that the employee they placed makes an error that leads to injury. Not only is the agency responsible for maintaining communication with the candidate, but they are also expected to pay out the employee’s workers’ comp. This is especially the case for temporary placements.
When it comes to working with different companies, staffing agencies need insurance as well. While your agency should ensure that every employer you partner with has insurance and looks out for its employees, you should also hold insurance of your own.
What Does Workers Comp Insurance Cover?
Before purchasing workers comp insurance for your staffing agency, you should know what it covers. The most obvious coverage included with workers’ compensation is medical expenses. Any hospital visits, medications, or surgeries associated with an injury or workplace event would be covered underneath workers’ compensation insurance.
Lost wages while an employee is out due to work-related injuries are partially covered by workers’ comp insurance as well. The insurance also covers disability insurance if the workplace incident results in short-term or permanent disability. Ongoing care costs for services such as physical therapy are also covered. In some cases, workers comp will cover some death benefits as well. This would cover funeral costs from work-related death and survivor’s benefits to the employee’s family.
Some states have extended workers’ comp to cover COVID-19-related illnesses. This would cover employees being exposed and contracting COVID on the job.
Compensation insurance benefits are paid out no matter who is at fault for the incident. The laws surrounding workers’ compensation prevent employees you placed from suing your agency too.
What is Pay As You Go Workers Comp Insurance?
Temporary staffing agencies may be interested in pay-as-you-go workers’ compensation insurance. A lot of the time, temporary staffing has a number of unknown variables and involves labor-intensive work. If something happens to a temp worker, having compensation insurance can save you a lot of trouble.
Holding insurance can be pricey though. Pay-as-you-go insurance allows you to cover the employees working for you currently. So, when you bring on a few contract workers or temp employees, you can expand your coverage accordingly. Similarly, you can dial your coverage back if you’ve made other staffing changes.
Working with a Broker Can Reduce Staffing Insurance Costs
It is easy to get caught up paying too much for your insurance coverage. Working directly with a broker can help you save money. This is because they will take the time to learn about your business, its insurance needs, and how they can best address them. Streamlining the process this way and having direct communication with a broker will save time and, ultimately, money.
This is because an individual broker works day in and day out to better understand the risks posed to the businesses in your industry. In this case, staffing agencies like yours. Your agency has plenty of things to keep track of and insurance is just another thing to add to that list. However, a broker can lift a lot of the worry off your shoulders and make things a bit more affordable.
Access to Affordable Commercial Insurance Agencies
On average, worker’s compensation costs $1 per every $100 in payroll. The cost of payroll for your business as well as previous workers’ comp claims are taken into consideration when pricing coverage for your agency too. Averages also vary state by state.
Working with a brokerage like Odell Studner can help you access more affordable commercial insurance policies. While brokers are still bound by state and federal insurance laws, they can cater your policy to your staffing agency’s specific needs. Private insurance products can be more affordable for smaller businesses and cater to your firm’s exact needs.
Risk Management Consulting
The best insurance you can provide your staffing agency with is good risk management. Consulting services can help you identify potential risks to your firm and what you can do to mitigate them. Whether it is through workers’ compensation insurance, other business insurance, or action on your part, a consultant can help you determine what direction is the best to pursue in managing the risks posed to your staffing agency.
Part of risk management when it comes to workers’ compensation is holding insurance. The second piece of managing workers’ comp risks is ensuring you have quality, trained employees on your staff. A risk management consultant could help you come up with training programs and identify weak spots on your staff. You may also implement safety programs that include things like written safety rules, updated training, regular inspections, first aid training, and preventative maintenance.
Contact Odell Studner to Learn More About Insurance for Staffing Agencies
When you are looking for staffing agency insurance, it is best to work with experts like the professionals at Odell Studner. The brokers working at our insurance firm are experts in finding the coverage that best suits your needs. From workers’ comp insurance to risk management consulting, our team of professionals is focused on providing you with solutions that reduce costs for your organization and improve productivity. Let us help you! Contact Odell Studner to learn more about workers comp insurance for staffing agencies and more.
