#1. Why it is hard to secure as a staffing firm
Getting Workers’ Comp for your staffing company is difficult due to the number and variety of class codes you need to carry on your policy. Each new account means new class codes and potential additions to your policy. This makes insurance carriers cautious, because the makeup of your business can change with each new client you secure.
In short – it’s complex, and some WC carriers just don’t want to deal with the staffing industry.
#2. Managing the cost
Managing the cost of WC insurance can be a hassle because each account you secure can potentially impact your entire policy. For instance if you have one account causing the majority of the claims, it can result in the increase of rates and premium for ALL of your accounts.
You also have to consider how you’re going to manage your claims across all your worksites. Many staffing companies will hire on-site supervisors to manage some of the larger locations – but the cost of that position is going to impact the profitability of the account.
#3. Choosing the right carrier
It is very important to perform due diligence prior to selecting a WC provider. Because of the aforementioned complexity, prior experience in the staffing industry is a must. You have a limited number of options when it comes to PEOs or insurance companies that specialize in staffing, and even then there are guidelines and exclusions that could apply depending on the industries you serve.
It’s a tough market, but some things that can help you when applying are strong safety practices and good hiring methods.
#4. Avoiding these common mistakes
Improperly classifying employees
Sometimes in the interest of time and pressure, a staffing company will use a code they believe adequately suits the employees duties rather than using the governing class code for the account. Don’t do this. Too often we see staffing companies classify worksite employees according to what they are doing, as opposed to the worksite environment they are working in.
Reporting claims too late
Unfortunately, when it comes to WC claims, they won’t go away on their own. The first 48 hours of any claims is critical to keeping it under control and managing the cost. When an incident occurs, you need to submit the claim ASAP.
Not getting employees back to work
You need to have some sort of “light duty” return to work program established when your workers get injured on the job. This helps employees recover faster and also reduces the amount of money that has to be paid out through workers compensation.
Securing WC insurance in staffing can be tricky, but if you know what to expect it can help you make informed decisions. If you need help finding affordable workers’ comp insurance, contact me anytime. Advance Partners has been servicing the staffing industry for over 20 years and we have made many contacts in that time.
For more resources visit the Strategic Services section of our website.
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