Staffing agencies are subject to more class action lawsuits than most any other industry today. From negligent hiring to failure to act, there are a number of reasons that a staffing agency may be sued, which is why it is so important that you, as the owner of an agency, invest in staffing agency insurance. The right professional liability policy can protect you from assuming financially liability when a company is dissatisfied with your services and files a claim against you because of it.
The most common reason that staffing agencies are sued is because of placement. Companies pay staffing agencies a lot of money to find them the ideal candidates, so when an agency provides wrong or improper workers, fails to test or screen applicants properly or misrepresents a candidate in order to produce some results, those companies may choose to sue. A sound errors and omissions policy can cover the cost of attorney fees, court fees and if applicable, settlement awards.
Though you may do your best to yield the best possible candidates for your clients, mistakes do happen. Protect yourself from costly mistakes and work with an insurance company that specializes in staffing agency insurance. It may be the best investment you make for your firm this year.