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.