Unique Risks in the IT and Engineering Staffing Segment
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IT and engineering are two of the fastest growing segments in the staffing industry. Currently, IT staffing represents approximately 20 percent, while engineering makes up 7 percent. However, the type of jobs placed and size of the companies doing business in this segment vary considerably. With that said, there are some common, as well as unique. liabilities that could cost IT/engineering staffing companies large sums of money.
Professional Liability insurance is a coverage that should be in place for any and all staffing companies. If your clients are not requesting this coverage now, they will in the future. One of the common elements of Professional Liability coverage is related to the pre-screening of temporary employees. If the staffing company didn’t do a thorough enough background, prescreen or reference check and the client company experienced a loss as a result of employee incompetence, the client company could be looking to the staffing agency for damages. Depending on the size, a staffing company could be faced with a large uninsured loss, legal fees or termination by the client.
IT and engineering staffing companies do have unique Professional Liability needs compared to the general staffing industry. Several insurance carriers have a Professional Liability product geared specifically for IT and engineering staffing companies. This coverage can be called by different names depending on the carrier. Some of the names you may have heard are Cyber Insurance, Technology Professional Insurance or Technology Errors and Omissions.
These specialized professional policies can cover programing errors, corruption or loss of data, software design errors and network security failures resulting in data theft – just to name a few that aren’t covered under normal staffing professional policies. In addition, you need to ensure the coverage protects your company for what services your employees are performing for a client. Each carrier can have different language, exclusions or endorsements which could cause gaps in coverage. IT and engineering staffing agencies need to discuss their operations, services provided and contractual requirements of their customers with their insurance broker to make sure coverage is adequate. Otherwise, you could be faced with an uncovered loss, when you thought you had the coverage.
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