IT Staffing

Locating specialized talent to meet client demands is challenging, but managing those employees can be an even greater challenge. While strong internal controls and employment verifications are intelligent risk management measures, even the the strongest controls can fail, leading to litigation. In fact, the potential for lawsuits exists simply due to employment verifications themselves, as the EEOC has been very active in their pursuit of “illegal” background checks. The only insulation against litigation is a well structured insurance program. Many staffing firms are overly familiar with the insurance requirements imposed on them by their clients, however many agencies approach the process of insurance placement as a burden. While it can be a time consuming process, it can also serve as an opportunity to better understand your internal risk. It is also important to understand that these insurance policies are not created equal. Approaching proposals with the sole intent of achieving the lowest available premium is a common mistake that can wind up proving to be a costly oversight in time of loss or litigation. It is more important to locate the best solution within an allocated budget. Claims asserted IT staffing firms can include:

  • Theft of clients property 
  • Employees installing backdoors on clients’ servers for data collection
  • Employment related claims including EEOC actions alleging illegal background checks, failure to hire/promote, wrongful termination, discrimination, sexual harassment, etc
  • Errors and oversights of temporary workers in coding or performing tech services
  • Professional liability (E&O) for “non-core” staffing operations such as consulting and/or software development

The risks faced by IT Staffing companies are considerably more varied than other businesses in the tech sector. As staffing firms rely more heavily on data/analytics, social networks and recruitment CRMs, that risk is evolving. And with many staffing firms offering a mix of services including software development and consulting, this risk is not one dimensional. Technological and regulatory trends such as the changes in data breach attacks, social engineering and EEOC activity further highlight the shifting risk landscape and the importance of partnering with a broker that understands your operations. In order to address the complex challenges faced by IT Staffing companies today, we leverage our experience and market knowledge to help you navigate the marketplace and structure “best fit” insurance programs.

Risk Profile

The Risk Profile below is an outline of your company's core exposures. Click to learn more, and select your coverages of interest to begin building your insurance portfolio or click "Connect With A Broker" to contact us.

  • Commercial Liability & Property

    Commercial liability packages (sometimes referred to as CPP's or BOP's) provide balance sheet protection in the form of financial reimbursement and liability protection in the form of coverage for defense costs and damages resulting from:

    • Claims asserting bodily injury and/or property damage
    • Product liability claims (unless excluded)
    • Advertising Injury such as libel, slander and infringement related claims 
    • Theft and property damage losses for inventory, business property, machinery, etc
    • Loss of business income
    • Equipment breakdown
    • Key Broadening endorsements (Transit coverage, basic cyber, employee dishonesty, ERISA, basic EPLI, and more)

    Due to the fact that endorsements can either broaden and extend coverage or limit/exclude coverage, policies should be carefully reviewed. Seemingly small endorsements such as “selling price” endorsements and business income coverage for dependent properties (such as suppliers, retailers and leaders) can provide substantial coverage enhancements. Due to the advertising risks faced by this sector, it is also often wise to seek coverage through a carrier that has a strong reputation for advertising coverage.

  • Professional Liability (E&O)

    Professional Liability insurance (also known as errors & omissions) provides liability protection for lawsuits brought by clients or 3rd parties asserting financial damages resulting from errors, acts or ommissions in providing services and claims asserting failure to perform or deliver. E&O provides defense costs, damages, and other costs associated with resulting claims and litigation. E&O is a critical insurance component for companies in the financial, professional services or technology sectors. 

  • Employers Liability & Workers Compensation

    Workers Compensation insurance is a mandatory coverage for companies with employees (including volunteers, uninsured independent contractors, leased or part time labor). It provides coverage for employees’ wages and medical payments resulting from injuries sustained while “on the job”. Coverages to consider include “broad form all states” coverage and foreign workers compensation coverage (especially important for employees traveling abroad for business). Additional employee related coverages that should be considered include: 

    • EPLI/Employment liability (protection for the hiring/firing of employees and discrimination/harassment related claims)
    • Employee benefits
    • ERISA/Fiduciary coverage (for the administration of employee benefits)
    • Long term disability
    • Kidnap & Ransom (for employees traveling abroad for business)
  • Directors & Officers (D&O) and Employment Liability (EPLI)

    Directors & Officers insurance provides:

    • Direct Protection for individual directors and officers against non indemnifiable claims such as derivative claims or bankruptcy related litigation
    • Balance sheet protection in the form of reimbursement to the entity itself for claims in which the entity indemnifies individual directors or officers
    • Protection for claims asserted against the entity itself

    Claims are often asserted by shareholders, investors, employees, creditors, competitors and regulatory agencies and can include:

    • Claims asserting misrepresentations made in private placement memorandums
    • Breaches Of Fiduciary Duties
    • Anti Trust & False Advertising claims
    • Creditor & Bankruptcy related claims
    • Accusations of Fraud

    Additional optional coverage components include:

    • EPLI/Employment Liability: Provides protection for the hiring, firing and management of employees. Such claims can include wrongful termination, failure to hire/promote, harassment, discrimination, and retaliation. Optional coverage can be included for claims asserted by clients, vendors and non-employees
    • Crime & Employee Dishonesty: Protection for the entity against theft, fraudulent invoicing schemes, warehouse theft, social engineering, etc
    • Fiduciary Liability: Protection for the directors & officers assets against losses caused to employee benefit plans
  • Cyber Liability & Data Security

    Cyber Liability insurance provides

    • First Party coverage for financial damages sustained by the entity including: lost income and restoration costs, notification and credit monitoring costs, costs related to extortion demands, and more
    • Third Party liability protection for claims and lawsuits arising from: failure to protect from (or prevent) an intrusion or transmission of a virus or attack, regulatory actions, media related liability, claims asserting breach of intellectual property and more.

    Claims can arise from

    • Data Breaches, viruses and unauthorized access 
    • Lost or stolen laptops and lost or stolen paper records
    • Transmission of a virus to others
    • Rasomware and extortion demands
    • Media related liability
    • Clerical and human errors in opening or transmitting files
  • Crime & Employee Theft (Including 3rd Party Crime)

    Crime & fidelity insurance provides protection for the entity against financial losses resulting from crime, theft and dishonest acts committed by employees, executives, independent contractors and other parties. Claims can include theft of money or securities, forgery, alteration, computer fraud, fraudulent invoicing, credit card and funds transfer fraud and more. More modern schemes include social engineering attacks (such as business email compromise, also known as CEO fraud).

    Third party crime coverage is particularly important for staffing firms and often requested by clients. It provides protection for theft of clients' property while your employees are working on their premises or have access to computer networks. 

Get (Risk) Managed.

Ready to review your existing insurance program? Interested in setting a reminder for a renewal review? Or simply have a question? We're here to help. We also understand you're busy - let's schedule a time to speak that works best for you. Simply schedule a call and we'll reach out when it's convenient.

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