While many insurance policies can provide coverage that protects the employment agency and/or the contract employers, some staff insurance policies can provide coverage that is beneficial to, and protects, the employees who are placed with the contract employers.
Liability insurance against wrongful employment practices can be beneficial to employees as well as to the employer and the employment agency. It covers situations where the employee alleges or experiences wrongful business practices. These practices could include discrimination, sexual harassment or wrongful termination.
The worker is usually considered an employee of the staffing agency because, in many circumstances, the staffing agency may pay the employee’s salary and benefits. The contract employer on the other hand, may assign and schedule the work, provide supervision and complete performance evaluations. If there is an occurrence of wrongful employment practices, the employee may bring charges against both the contract employer and the staffing agency. One instance of a charge of such liability could bankrupt a staffing agency or employer, leaving the victim with little to no compensation. Liability insurance could cover the staffing agency and the employer should acts of wrongful business practices occur at the employment site.
Staff insurance can be valuable to both the employees and client employers. It can give employers and potential employees the added assurance that certain liabilities may be covered.