Thursday, January 11, 2024

Advantages of Partnering With a Staffing Agency for Insurance Companies

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Insurance staffing agencies play a critical role for companies of all sizes. They help their clients find the right talent for their roles. But they face their risks, like on-the-job injuries and property damage from temporary workers. Errors and omissions, theft, and crime insurance policies may also be necessary to protect their business.

Employer of Record Partner

A staffing agency is a great solution for companies that need help finding or recruiting talent. It can also save on hiring costs when filling gaps in a business, such as covering for an employee taking time off or a project requiring specialized skills. But one of the most significant benefits of insurance staffing solutions is its ability to act as an employer of record (EOR) for contract employees. In this role, the staffing firm serves as the legal employer of workers for short-term assignments and takes care of all payroll taxes, insurance, and other HR tasks. The EOR model can greatly reduce a company’s long-term hiring costs by temporarily adding employees.

EORs are especially helpful for businesses that need flexibility for project-based employees, such as engineers or IT professionals. A contract employee usually works on a fixed-term contract and is only paid for hours worked. Staffing agencies can also provide other client savings by offering a co-branded workers’ comp policy billed on a pay-as-you-go basis.

Choosing an EOR partner member of the American Staffing Association can be a good idea, as they will be current on the industry’s latest issues. However, some independent EOR providers can offer competitive pricing and various services.

Workers’ Comp Insurance

Staffing agencies have a lot of things to keep track of, and insurance can be one more thing they need to add to their list. However, a good insurance broker can help take the burden off of the agency by handling the details of workers’ comp for them. This will allow the agency to focus on placing temporary employees. Most state laws require staffing agencies to carry workers’ compensation coverage when working at a client’s location. This protects the agency and the temporary employee in case of an accident. Typically, this covers medical expenses associated with the injury. It also helps to cover lost wages while the employee is out of work.

Having the proper workers’ comp coverage can also help prevent lawsuits brought against the agency by clients who believe they were wrongfully injured by one of their employees. The agency and its clients must understand the laws in their state regarding co-employment so there are no surprises if an accident occurs. Managing a workforce with a mix of temporary and permanent employees is challenging for any company. A good insurance broker can help the staffing agency manage these issues by setting up a workers’ compensation system that will help ensure that all employees are properly classified according to their job duties and skill levels. 

Brokerage

Staffing agencies can speed up the hiring process, fill vacancies quickly and provide access to talent that may not be available. But they’re not without risk. Staffing firms must meet numerous legal obligations, such as covering taxes, providing health insurance coverage, and complying with labor laws.

They’re also responsible for handling employment-related legal details, such as confirming whether temporary and temp-to-hire workers are considered employees or independent contractors. Additionally, many states require that staffing agencies carry workers’ compensation insurance for their temporary employees.

In addition to workers’ comp, staffing agencies are often required to carry a commercial general liability policy. This type of insurance protects staffing agencies against claims from third parties for property damage and bodily injury caused by a temporary worker while at work. It’s important to note that most general liability policies have a deductible. Choosing a higher deductible can lower the premium, but it also means you’ll be responsible for a larger amount in case of a claim.

Luckily, getting the right insurance for staffing agencies is straightforward. A digital broker can help you compare costs and buy coverage online, from commercial general liability to a business owner’s policy (BOP). They offer multiple options for all types of staffing agencies and will ensure you meet all your state’s minimum requirements.

Open Enrollment

Staffing agencies are often required to provide employees with health insurance as part of their hiring process. Some firms also face regulatory complexities when offering temporary or placement workers benefits. For example, a direct-hire agency that contracts employees to multiple clients may need help determining whether it has met the Affordable Care Act’s (ACA) requirement that employers offer 30 hours of work per week to qualify for healthcare benefits. In addition, open enrollment for employee-provided benefits can be confusing and time-consuming, especially when dealing with remote workers who may have different home office setups, making it difficult to print materials or fill out online forms. For these reasons, an EOR partner can greatly help provide an efficient and streamlined open enrollment process.

The specific insurance needs of a staffing agency can vary depending on its operations. Still, most need some form of commercial general liability (CGL) to cover third-party property damage or injury.

Asad Chaudary
Asad Chaudary
Asad is an experienced content writer who has dedicated over three years to honing his craft. With a strong passion for writing and a keen eye for detail, he has consistently delivered outstanding content for various companies, businesses, and industries.

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