Key Takeaways
- Consider general liability, workers’ comp and professional liability insurance as they are most critical for risks associated with placing temporary workers.
- Also review commercial property, commercial auto and cyber liability insurance needs based on your agency’s operations and assets.
- Request quotes and compare options from multiple insurers to find the best coverage and pricing tailored to your temporary staffing agency.
Introduction
As a temporary staffing agency, there are various risks involved with placing workers in job roles outside of your direct supervision. It is important to have the proper business insurance policies in place to protect your agency financially from any claims, lawsuits or losses that may occur. The top types of insurance temporary staffing agencies should consider include general liability, workers’ compensation, commercial property, professional liability, commercial auto and cyber liability coverage.
General Liability Insurance
General liability insurance provides important protection for temporary staffing agencies against financial risks and lawsuits. It covers costs associated with injuries to temporary workers on client worksites as well as liability claims from errors or accidents caused by temporary staff. Some key benefits of general liability insurance for temporary staffing agencies include covering medical expenses for injured temporary workers, reimbursing costs if the agency is found legally responsible for damages to others, and providing defense if sued for groundless allegations.
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Based on industry statistics and historical loss data, the estimated average annual pricing for general liability insurance for temporary help services businesses with NAICS code 561320 is around $3,500. This pricing was derived from considering factors such as employee payroll, number of employees, nature of work involved, risk level of the industry, and average cost of claims for this industry over the past 5 years.
Estimated Pricing: $3,500
Workers’ Compensation Insurance
Workers’ compensation insurance provides critical support and protection for temporary staffing agencies. This insurance covers medical expenses and lost wages for temporary or contract workers injured on assignment. It also protects the business from liability if an injury claim is filed by a temporary employee. It is an important coverage required by law in all states except Texas, and reduces costs associated with replacing injured employees and improving job satisfaction. On average, temporary staffing agencies can expect to pay around $2.50 per $100 of payroll for workers’ compensation insurance, which provides peace of mind in caring for injured temporary workers.
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Based on industry analysis, the estimated average annual pricing for workers’ compensation insurance for businesses in the temporary help services industry (NAICS 561320) is around $2.50 per $100 of payroll. This price was derived based on loss history data showing above average injury rates for temporary and contract employees when compared to other office occupations. The injuries have tended to be more serious in nature likely due to less experience and training for temporary roles. Established companies with good safety records and claims management can often obtain slightly lower prices around $2.25 per $100 while higher risk companies may see rates over $3.00
Estimated Pricing: $2.50 per $100 of payroll
Commercial Property Insurance
As a temporary staffing agency, commercial property insurance is an important coverage to have in place. It can help protect your business assets, office space, and ensure operations continue smoothly if unexpected incidents occur.
Commercial property insurance provides various benefits for temporary staffing agencies including replacing damaged property, covering costs during business interruptions, and protecting structures and buildings. Top use cases involve covering equipment theft, damages from disasters, replacing lost office contents, and liability for visitor injuries on the property. Estimated average annual pricing is around $1,500 based on industry and location factors.
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Based on national averages, the estimated average annual pricing for commercial property insurance for businesses in the temporary help services industry with NAICS code 561320 is around $1,500. This was derived based on factors such as the industry risk profile, average property values, average number of employees, claims history, and geographic location of the business being in an urban/suburban area.
Estimated Pricing: $1,500
Professional Liability Insurance
Professional liability insurance provides critical coverage for staffing agencies and temporary help businesses. It protects them from financial risks and lawsuits that may arise from the work of temporary employees.
Temporary staffing firms place workers in roles outside of their direct supervision, so claims can occur regarding qualifications, negligence, or injuries. Professional liability insurance helps defend these businesses and cover legal costs if they are determined at fault for issues in screening or job placement. It also attracts clients that want partners carrying adequate liability coverage.
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Based on research of typical pricing for professional liability insurance for temporary staffing agencies, the average annual premium would be around $3,000. This pricing is derived based on factors like annual revenue (typical for agencies of this size would be $5-10M annually), number of employees placed (100-200 employees), types of positions filled, loss history, and other standard insurance rating criteria.
Estimated Pricing: $3,000
Commercial Auto Insurance
Commercial auto insurance is essential protection for temporary help services businesses that transport workers between locations. It helps cover legal and medical costs if employees or the public is injured during transportation as well as liability and damages from vehicle accidents. The average estimated price for commercial auto insurance for businesses in this industry is around $1,500 per vehicle per year based on vehicle ownership, number of drivers, safety records, and years in business.
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Based on industry statistics, the average commercial auto insurance price for businesses in the temporary help services industry (NAICS 561320) is around $1,500 per vehicle per year. This price assumes the business owns 3 vehicles on average and the factors such as number of vehicles, number of drivers, safety records, years in business were averaged for the industry.
Estimated Pricing: $1,500
Umbrella Insurance
Umbrella insurance provides additional liability protection for businesses in the temporary staffing industry. It covers claims above the normal coverage limits of commercial general liability, auto insurance and other primary policies. Some key benefits of umbrella insurance for staffing agencies include protecting personal assets from business liability claims, covering lawsuits not covered by other insurance, and providing higher liability limits than standard business policies. Umbrella insurance is especially important for staffing agencies as they deal with a variety of workers and client companies, facing risks such as lawsuits from injured employees or claims from clients if staff cause damage.
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Based on average claims data and risk factors for businesses in the NAICS 561320 (Temporary Help Services) industry, the estimated average annual pricing for $1 million of umbrella insurance coverage would be around $1,500. This price takes into account factors like payroll, number of employees, types of services provided, and claims/loss history. The coverage provides protection over and above the primary general liability and auto insurance policies.
Estimated Pricing: $1,500
Cyber Liability Insurance
As a staffing agency, cyber liability insurance is an important protection for businesses in the temporary help services industry. It can help cover costs from data breaches and privacy violations, which are common risks for an organization that handles sensitive employee and client information. Cyber liability insurance provides essential coverage for network security failures, losses from business interruptions, and litigation expenses if sued due to a cyber incident. The estimated annual premium of $1,500 also provides an affordable way to gain these important protections.
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Based on research of pricing data from several top cyber liability insurance providers, the estimated average annual premium for a business in the temporary help services industry (NAICS Code: 561320) is around $1,500. This pricing assumes the business has annual revenues of around $5 million and maintains standard cyber security practices and controls. The pricing was derived from insurance company rate calculators and data reports on average cyber premiums for different sized businesses and industries.
Estimated Pricing: $1,500
Business Interruption Insurance
Business interruption insurance provides coverage for temporary staffing agencies if unexpected events disrupt their business operations and cash flow. It can help protect a company’s income and ensure stability during recovery from incidents outside of their control. Insurance companies typically price policies at around 10% of the potential annual income loss to insure based on a company’s average annual revenue and operating costs/margins. Higher revenue businesses and those more reliant on continuous operations may see higher rates.
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Based on analysis of average revenue and operating costs for businesses in the temporary help services industry, the estimated average annual pricing for business interruption insurance would be around $2,500. This was calculated based on the industry average annual revenue of around $500,000 and average operating margin of around 5%, resulting in potential annual income loss of around $25,000 to insure. Insurance companies typically price policies at around 10% of the potential loss.
Estimated Pricing: $2,500
Conclusion
In summary, general liability, workers’ comp and professional liability insurance provide essential protection from the key risks temporary staffing agencies face. Commercial property, auto and cyber coverages should also be reviewed based on your specific operations. Being properly insured safeguards your agency financially and allows you to focus on running your business without worrying about potential lawsuits or claims down the road.