| When starting a staffing company, it is important to | | | | the right insurance partner that understands YOUR |
| note that before you send out your first temporary | | | | staffing business, ask them to recommend coverage |
| employee, you must have adequate business | | | | amounts and types of policies. If you already have |
| insurance in order to conduct business. At a bare | | | | staffing clients in place, or if you have potential clients |
| minimum, you will have to purchase Worker's | | | | you will be doing business with, ask them to send |
| Compensation and General Liability Insurance. On top | | | | you their standard staffing contract. More than likely, |
| of those insurances, it would be a good idea to | | | | your client will have a section in their contract that |
| consider buying a G/L policy that will also include | | | | will cover insurances, and how much and what types |
| Professional Liability Coverage, as well as Errors | | | | you need to have in order to do business with them. |
| & Omissions (E&O) coverages. The biggest | | | | Keep in mind, your clients want to deflect as much |
| challenge a staffing agency owner may face could be | | | | insurance risk on to you as possible. They would |
| identifying an insurance company that truly | | | | prefer to have zero risk in having your employees |
| understands the staffing industry. | | | | work on-site at their location. If a potential client is |
| Unless you are working with someone who | | | | asking for more insurance coverage than you will be |
| understands your business, you will spin your wheels | | | | able to pay premiums for, you may consider trying |
| in trying to secure proper insurances. The challenge | | | | to renegotiate their contract, or consider foregoing |
| with underwriting an insurance policy for a staffing | | | | that business. It may not be worth the extra |
| company is the fact that you are or will be sending | | | | premium dollars you will pay in order to pick up the |
| out temps or contract employees to remote, 3rd | | | | staffing business. However, if the margins are large |
| party client sites, which can cause you to lose direct | | | | enough, and you feel certain the client will utilize your |
| control over those employees. If those employees | | | | services for a long-term period, you should consider |
| worked on-site every day at your office location, the | | | | upping the insurances to grow your business. |
| risk would be easier to assess. However, in the | | | | As a start-up staffing company, you may have no |
| staffing world, your direct employees work at client | | | | choice but to purchase your Worker's Compensation |
| locations, which adds risk from an insurance | | | | insurance from a State Fund, rather than from a |
| company's perspective. Insurance companies have a | | | | private insurance company. The laws are different in |
| larger underwriting task when taking into effect that | | | | each state, but when you speak to your insurance |
| your employees may be asked to perform certain | | | | agent, find out if private insurance is available for |
| tasks at a client location that you may not otherwise | | | | Workers Comp, due to the fact that it may be less |
| ask them to perform if they were on-site at your | | | | expensive to purchase than from the State. |
| office. | | | | Also, you will either have to estimate your payroll or |
| I would imagine researching insurance companies, | | | | sales/revenue in order to get a quote on your |
| finding the right company and insurance policies to | | | | insurances. I would be prepared to have a projected |
| purchase, then actually purchasing the policy would be | | | | figure in mind. Don't over-estimate payroll or sales |
| about as much fun as making a trip to the dentist. | | | | because you may end up paying more each month in |
| Both are quite necessary, but not much fun. | | | | premiums during the first year, which could eat up |
| However, if you don't have insurance for your | | | | profits from the business. Also, don't under-estimate |
| staffing business, you will not be able to operate | | | | because you may be hit with a major one-time |
| your company. | | | | premium at the end of the year due to withholding |
| How do you know just how much insurance to | | | | less during the year. It's a tricky calculation, but |
| purchase, and what types are right for your firm? | | | | hopefully your agent can assist you in your |
| You don't want to be over-insured, but you certainly | | | | calculations. |
| don't want to be under-insured either. Once you find | | | | |