Why Your Staffing Agency Needs EO Coverage

No matter the business you work in, mistakes can happen. E&O insurance coverage for staffing agencies covers errors and omissions that may happen. While E&O coverage does cover mistakes, it does not cover intentional acts. Here are two of the most common risks for staffing agencies.

Staff Performance

Sometimes, you perform all the required background checks but when you place a contract worker with a company, he or she makes mistakes. If the mistakes lead to a financial loss, the client may file a lawsuit against your firm. Your agency is responsible for your employees.

If your staffing firm is in the medical industry, then you may face lawsuits more often. Nurses and other healthcare professionals carry a higher exposure to medical malpractice.

Staff Placement

If you make a mistake on staff placement, you could be held liable for it. For instance, staff replacement risk refers to:

  • Placing an unqualified worker
  • Failing to provide work
  • Failing to perform a screening

A worker could file a lawsuit against the staffing firm claiming that it misrepresented the company that they were placed with.

 Staffing agencies carry a lot of risks. No matter how professional your agency is, lawsuits happen. Even with risk mitigation, you have to be prepared. E&O coverage protects against a variety of mistakes.

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