For staffing agencies, the topic of workers’ compensation is important to their overall profitability and success in the industry. There may be many different challenges that present themselves when it comes to staffing workers’ compensation and finding the right solutions can be difficult. Even for experienced staffing agency owners, this can be overwhelming. Workers’ comp questions in the staffing industry are important to address.
Most Common Staffing Agency Work Comp Questions
But it’s important to know how to face these challenges and get out ahead of them for future success. Here are some answers to common workers’ comp questions from staffing agencies.
Why is workers’ compensation insurance such an issue in staffing agencies?
Due to the number and variety of class codes a staffing agency will need to carry on their policy, securing this kind of coverage is a little more difficult than traditional companies. Every new account that a staffing agency provides work for will need an identification of class code, which may also entail them adding this code to their WC policy.
Workers’ comp carriers may be cautious to provide this kind of insurance to a staffing agency due to the variety and complexity of the business it operates. Each new account presents a unique set of challenges, essentially, including managing the cost of insurance for each new account.
What is the current market like for workers’ comp insurance in staffing?
Insuring temporary labor can be risky for any insurer as temporary staffing firms have been known to misclassify payroll while also assigning workers to work at companies that have set aside their own workplace safety obligations. The insurance market for staffing firms is hardening as there are only a select number of insurance companies that will work with staffing agencies openly. Strong safety practices and well-executed hiring methods can help to aid a staffing agency looking for coverage.
What can owner/operators of staffing agencies do to better position themselves for coverage?
It’s important for a staffing agency to perform its due diligence before selecting its WC provider. One way to do this is to establish the provider’s experience in the staffing industry specifically. Due to the turnover in class codes and the importance of calculating bill rates, a staffing firm would need to make sure the WC provider has the right level of expertise in the staffing world.
It’s not uncommon to see staffing agencies classify worksite employees according to what work they are performing. By correctly classifying an employee, a firm is ensuring it is calculating adequate bill rates and ensuring profit margin.
About Monarch Partners Group, LLC
For more than 30 years, Monarch Partners Group (MPG) and affiliate Nationwide Employer Services LLC have focused on providing Workers’ Compensation insurance solutions for distressed risks and industries. Our long-term history and expertise in the space and market sources enable us to find solutions for business owners and brokers that they may otherwise not have access to. We write Workers’ Compensation coverage for all types of risks in all states with solutions that Employer Organization (PEO), Employer Of Record (EOR) and Captive Insurance programs. To learn more about our products and services, contact us today at (855) 435-5153.