Considerations for Your Employment Services Liability Coverage

Employment practices liability
Employment practices liability

As a staffing services company, you’re tasked with balancing out the needs of your clients, who provide you with the opportunities to provide your surface, with those of your employees, who are your resource in taking advantage of those opportunities. As such, you need to consider what sort of protection is available to both. An employment practices liability insurance policy offers protection to you and your clients in the event of an employee complaint, as well as the opportunity for your employees’ arguments to be heard if they’ve felt wronged.

Yet arranging such employment practices liability coverage can be complicated; this isn’t just a simple general liability policy. It’s designed to cover employee complaints in both your offices and while working for a client. Here are a few things for you to consider when securing such coverage:

  • This coverage often considers both legal fees and settlement costs involved in a complaint. So the more money spent arguing a claim means a higher payout when a claim is finally resolved. Thus, many of these policies have a “hammer clause” that calls for all claims to be settled, regardless of merit. Consider if this is how you want matters handled when selecting your policy.
  • Employee protection laws vary from state-to-state. If you provide staffing solutions to clients in multiples states, your policy should be tailored according to each state’s rules and regulations.
  • This coverage is meant to be a last line of defense against extensive legal action. It should never replace risk management as part of your business model, and a proper risk assessment should be part of your liability planning.

An employment practices liability insurance plan can provide peace-of-mind to you, your clients, and your employees. Consider such coverage as part of your staffing company’s insurance package.