All organizations have to think about liability and the potential for lawsuits. Staffing agencies are no different. When it comes to running a staffing agency, some risks could result in devastating legal costs, lawyer fees and settlements. Here are two of the major risks to a staffing agency.
Lack of Employee Screening
One of the biggest risks that a staffing agency can take is to not screen its employees properly. Generally, agencies will look into prior employment and will perform drug testing and other pieces of the vetting process. If there is any failure in the process or if a recruiter takes a shortcut, it can result in money lost for the company.
Lack of Insurance Coverage
Risk management is critical for all businesses, including staffing agencies. Without adequate insurance, your business could lose its assets because of a third-party lawsuit. General liability protection should be the first policy considered by agencies. Next, employment practices liability, excess liability and errors and omissions should be part of the risk mitigation plan.
Lawsuits make it difficult for a staffing agency to continue its operations. If an employee is injured or if a client claims financial loss because of your errors or omissions, you could lose your business entirely. With the right staffing insurance solutions, you’re less likely to lose your assets.