As an IT staffing agency, your clients require you to place suitable candidates for their needs. If you provide short-term staffing placements, it’s common for you to be listed as the employer, which opens you up to a variety of potential areas of liability. It’s important to consider purchasing business insurance coverage to financially protect your company from a variety of risks, whether it’s a physical disaster like a fire, a lawsuit alleging professional negligence, or a cyberattack.

What insurance coverage do I need for my IT staffing company?

While there are many types of coverage for companies to consider, these insurance policies are particularly important for IT staffing agencies to consider:

Professional Liability Insurance

When clients make use of your IT staffing services, they expect you to provide them with appropriate staff for the roles they need to fill. You provide a professional service, and your client will expect a professional result. If you are negligent in a background check or send someone who isn’t qualified for the role, it could have a negative effect on your clients, and they could sue. Professional liability insurance can protect your business against these risks by covering lawsuits and damages brought by dissatisfied clients alleging failures in your professional services.

Example:

• You place a database administrator with a client company. The database administrator is negligent in his work, accidentally misconfiguring a database that results in the loss of data on thousands of customers. The client must hire another firm to help restore the data. They sue you for damages, alleging that the employee was not qualified for the role. Your insurer would cover the lawsuit and any resulting settlement.

General Liability Insurance

As an IT staffing company, it’s crucial to ensure that you purchase general liability insurance coverage. If you supply companies with temporary IT staff, the staff are typically considered employees of your company. If they cause property damage at the company they have been placed with, you could be held liable. In addition, it’s likely that potential staff and clients visit your offices, and there’s always a chance that someone could be injured while on your property. General liability insurance covers these third-party bodily injury and property damage risks. It also includes a personal and advertising injury component, which covers risks including libel, slander, and copyright infringement.

Example:

• Bodily injury: A computer repair technician visits your offices to perform repairs. She trips on a loose electrical cord and falls down the stairs, breaking her arm. Your general liability insurance would pay for medical fees, as well as any legal costs if the repair technician sues.
• Property damage: Your company places a web designer on a temporary contract at a large technology firm. The web designer accidentally damages an expensive 3D printer. Your general liability insurance would pay for damages.
• Personal and advertising injury: Your company creates a new logo to use in an advertising campaign. The logo turns out to appear very similar to another company’s logo. The company sues you for damages. Your insurer would pay for legal defense and any settlements.

Cyber Liability Insurance

As an IT staffing company, you likely store sensitive and private information on candidates and clients, including Social Security numbers, addresses, and bank account information. This means that it’s particularly important for you to protect your business from cyberattacks. No matter how many extra precautions you take to keep your data safe, cybercriminals frequently develop new methods of breaking into digital systems, so there’s always a risk that you may be hacked or your data may be held for ransom. Cyber liability insurance can provide financial assistance to help your company stay in business in the event of cyberattacks, and insurers often provide resources to help you prevent incidents as well.

Example:

• Hackers access your database of current and former staffing candidates and steal personally identifiable information, including addresses, email addresses, and Social Security numbers. The candidates sue you for failing to keep their private information secure. Your cyber liability insurance would pay for the lawsuit and any settlements or judgments against your company.

Commercial Property Insurance

Most IT staffing companies operate from owned or rented office space and rely on valuable business property, such as computer equipment and office furniture. Commercial property insurance can help protect the value of this business property. If an unexpected disaster damages or destroys your building, it can be difficult and expensive to recover from the loss. Commercial property insurance can help provide funds to replace or repair damaged business property in the event of a fire, storm, explosion, or other covered peril.

Commercial property insurance covers the following:

• Buildings belonging to or leased by your company
• Contents of the building, including computer equipment, office furniture, and artwork
• Property of others while it is under your care, custody, or control

Example:

• Lightning strikes your building, starting a fire that damages your office building as well as computers, printers, and furniture. Your commercial property insurance will pay for the cost to repair the roof and replace computers and other items that have been damaged.

Additional Coverage

• A business owner’s policy bundles general liability, property, business income, and extra expense coverage into one package. For small or midsize companies, this type of policy could help you obtain a wide range of coverage while paying less in premiums than you would if you bought each policy individually.
• Business income insurance will reimburse you for lost income and operating expenses if your business is unable to operate due to a covered reason, such as fire, storm damage, or other property damage.
• Workers’ compensation insurance is legally required for companies with employees in most states. It covers employees’ medical expenses and lost income if they are injured while working. If you place short-term staff who are employed by your company while on assignment, it’s particularly necessary to make sure you have sufficient workers’ compensation coverage to cover them if they are injured on the job.
• Employment practices liability insurance protects your business against lawsuits by employees accusing your business of wrongful treatment such as discrimination, harassment, or other employment-related issues.
• Fidelity bonds protect your business from losses caused by theft, fraud, or dishonesty committed by your employees. This coverage would protect you if an employee unlawfully accesses confidential customer data.

Pricing and Quotes

Pricing for business insurance will vary based on the type of insurance coverage and the risk profile of your business. Insurers consider factors such as:

• Business size
• Industry
• Location
• Number of employees
• Claims history

Businesses with higher risks will have higher premiums than those deemed lower risk. For example, an IT staffing agency with a history of frequent claims will face higher premiums. Premiums also rise as you increase the limits of insurance. Different insurance companies have different models for rating risks, so it is worth comparing pricing across different insurers.

In order to get an accurate estimate on pricing, it’s best to get a quote from a reputable insurance company. Below we’ve highlighted a few of our trusted partners who offer coverage for staffing businesses:

Provider	General Liability	Professional Liability	Business Owner's Policy
Embroker	??	??	??
CoverageSmith	??	??	??
CoverWallet	??	??	??
Hiscox	??	??	??
Thimble	??	??	??

Final Word

Your IT staffing company could be held liable for a variety of risks, from physical dangers such as fires and storms to cyberattacks and lawsuits brought by dissatisfied customers. It’s a good idea to consider your business’s needs and purchase insurance that will financially protect you in the event of an unforeseen disaster or lawsuit. With the right insurance coverage, you and your clients will feel confident in the knowledge that your company would be able to cope with any major incidents that arise.