Why Staffing Companies Need Errors & Omissions Insurance

temporary staffing insuranceThe Staffing Industry performs a professional service for others and can be held legally accountable for their actions. Lawsuits can be brought against any professional for alleged, or actual, mistakes. Defending against these suits can be costly, even if no error was made!


What is Errors & Omissions Liability Insurance?

Errors & Omissions Liability insurance protects your company against alleged wrongdoing.

These can include such things as:

  • Misrepresentation with a client.
  • Failure of a worker to perform as promised.
  • Honest mistakes that occur in the normal course of business.

When Should You Buy It?

It’s best to get this coverage in place at the inception of your business. Purchasing Errors & Omissions policy early on before any client dealings and personnel placement is always preferable. But it can also be added onto your insurance program at any time.

Why Does Your Staffing Company Need It?

Errors & Omissions Liability insurance is not covered by your General Liability policy. Adding this coverage to your insurance portfolio will not only provide the protection you need, but it will also provide legal defense which can be quite costly with any litigation.


Take for example the case of an internationally known IT firm that hired several personnel from a staffing firm. Two of these personnel were caught stealing trade secrets and were promptly terminated. The IT firm sued the staffing recruiter because of discrepancies on the personnel background checks. The jury found the staffing firm guilty of professional misrepresentation and awarded the IT firm with a $1,000,000 judgment for damages.

Are you prepared to pay out-of-pocket due to inadequate insurance for such claims? With the ever-increasing cost of lawsuits, I highly recommend adding this protection to your insurance program.

For more information about Errors & Omissions and temporary staffing insurance, contact me at MGarver@SouthernStatesInsurance.com or call me at (678) 715-0363.

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