One early December morning, the staff at Acme Works, a small firm that provides consulting and employment resources for local businesses, found themselves thrust in the middle of a liability lawsuit instead of the holiday party they'd been planning for. They were horrified to learn that a mid-level engineer they had placed at a firm more than a year ago was found to be committing fraud—so much for the firm's 100-percent-success rate that they'd featured in their advertising program! The person had accepted a position at one company, yet unbeknownst to the employment firm, obtained a second position at a competitor's business. He took advantage of the fact that at both jobs, his managers were physically located at a different corporate office, so the employee had little to no direct supervision. Not only had the employee been getting away with collecting two paychecks while defrauding the employer about the actual amount of work he had been putting in, he was in a position where he had access to company-proprietary data and had compromised that data on several occasions. When the employee's duplicity was finally observed, he was summarily fired—and the hiring firm was slapped with a lawsuit by the employer, which felt the firm should have never offered the employee as a candidate for hire. Many months and dollars later, a staffing agency insurance policy was the only thing that kept Acme Works from going out of business.

Policy offers protection from liability

Fortunately, the business coverage program that Acme Works had purchased included a policy that provided protection for professional liability resulting from the direct hiring and personnel consulting services that the company provided, which includes everything from employment placing to career counseling and providing resume writing advice. Coverage extends to a variety of individuals at the firm—the regular in-house staff and independent contractors, interns, and volunteers too. The policy offers protection should any of those persons (or the hiring employer or the employees that Acme Works places in positions) be sued for wrongful acts, or errors or omissions (E&O) as a result of the direct-hire or personnel consulting they provide.

Talk to a professional about options

Staffing agency insurance is essential for employment firms today, in an environment where liability lawsuits are commonplace. Talk to a professional insurance agent, who can provide a wealth of guidance and advice about a comprehensive approach to protection for the firm.