When starting a staffing company, it is important to note that before you send out your first temporary employee, you must have adequate business insurance in order to conduct business. At a bare minimum, you will have to purchase Worker's Compensation and General Liability Insurance. On top of those insurances, it would be a good idea to consider buying a G/L policy that will also include Professional Liability Coverage, as well as Errors & Omissions (E&O) coverages. The biggest challenge a staffing agency owner may face could be identifying an insurance company that truly understands the staffing industry.
Unless you are working with someone who understands your business, you will spin your wheels in trying to secure proper insurances. The challenge with underwriting an insurance policy for a staffing company is the fact that you are or will be sending out temps or contract employees to remote, 3rd party client sites, which can cause you to lose direct control over those employees. If those employees worked on-site every day at your office location, the risk would be easier to assess. However, in the staffing world, your direct employees work at client locations, which adds risk from an insurance company's perspective. Insurance companies have a larger underwriting task when taking into effect that your employees may be asked to perform certain tasks at a client location that you may not otherwise ask them to perform if they were on-site at your office.
Unless you are working with someone who understands your business, you will spin your wheels in trying to secure proper insurances. The challenge with underwriting an insurance policy for a staffing company is the fact that you are or will be sending out temps or contract employees to remote, 3rd party client sites, which can cause you to lose direct control over those employees. If those employees worked on-site every day at your office location, the risk would be easier to assess. However, in the staffing world, your direct employees work at client locations, which adds risk from an insurance company's perspective. Insurance companies have a larger underwriting task when taking into effect that your employees may be asked to perform certain tasks at a client location that you may not otherwise ask them to perform if they were on-site at your office.