The Importance of Professional Liability Insurance

PEO insurance

Staffing agencies can perform a variety of functions. These include, but are not limited to, career counseling, resume writing, background checks, employee benefits, and direct recruiting and placement. Agencies who perform these functions may also be referred to as PEO’s (Professional Employer Organizations) and there can be a certain amount of liability associated with each function performed. PEO insurance can protect agencies in two ways.

Employees can be placed with contract employers in a variety of industries such as banking, medical, manufacturing, construction, etc. If, for example, an employee is placed in a job at a bank and subsequently steals money from the bank, the staffing agency could be liable for the loss sustained by the bank as a result of the theft, since the worker would likely be an employee of the staffing agency on assignment at the bank. Insurance could cover the cost of this liability.

Likewise, if a worker, placed on a job in a medical field as a nurse causes injury to a patient and it is later discovered that the person did not have the credentials to be a nurse, the staffing agency could be liable for failure to properly check the credentials of the employee before placing him/her with the company. A good PEO insurance policy could cover the contract employer’s loss and protect the staffing agency.