Category: Service

SIC CODE: 7361 Employment Agencies

NAICS CODE: 541612 Human Resources Consulting Services

56131 Employment Placement Agencies

561320 Temporary Help Services

Suggested ISO General Liability Code: 43200

Suggested Workers Compensation Code: 8810

Description of operations: Employment agencies may offer several different types of employment-related services or may concentrate on just one industry. Services commonly offered are placing a worker with a permanent position, finding a specific type of worker for a customer company, providing employers with short-term or temporary help, or providing workers with job counseling.

The worker seeking employment, the customer company seeking the worker and the employment agency must fully understand the terms and conditions of the employment arrangement. The contractual agreement should define who is obligated and responsible for providing workers compensation coverage, who pays the fee for the employment arrangement, who handles payment to the employee, who accounts for taxes and other mandatory deductions, and who provides miscellaneous employee benefits, if any, such as health insurance or a 401(k) savings plan.

Property exposures are generally limited to that of an office. Fire sources include electrical wiring, wear, and overheating of equipment. There may be some theft potential, depending on the amount and type of electronic equipment on hand.

Crime exposure comes from employee dishonesty. Hazards increase without proper background checks, along with monitoring procedures and securing of all records to prevent unauthorized access. All job duties, such as ordering, billing and disbursing should be separate and reconciled on a regular basis. Audits should be performed at least annually.

Inland marine exposures consist of accounts receivable, computers, and valuable papers and records. Duplicates should be made and kept in an off-site backup facility for easy reproduction following a loss.

Premises liability exposure is moderate due to the number of clients visiting the premises. The waiting area and other places where the client has access must be well lighted with floor covering in good condition. Personal injury liability is a high-potential exposure. The agency must take great care to maintain confidentiality when obtaining and releasing information regarding workers and employers.

Professional liability exposure is high. The background, training, and licensing of the agency's own employees requires review and evaluation. All procedures must be followed and licenses maintained. Employees must be matched with the needs of clients. Misrepresentation of either party may result in allegations of negligence.

Automobile exposure may be limited to hired and nonowned. The exposure increases if the agency offers shuttles for temporary workers, transport to job interviews, or if employees use their own vehicles for agency business. Drivers must have appropriate licenses for the exposure. MVRs should be run on a regular basis. Vehicles must be maintained and records kept in a central location.

Workers compensation exposures are generally limited to office-type hazards. Concerns include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be reduced through ergonomically designed workstations. If workers are leased or rented out, the exposure increases as the company has little control over the client’s work premises or hazards. The employment contract should specify whether the company and the client provide workers compensation coverage.

Minimum recommended coverage:

Business Personal Property, Employee Dishonesty, Accounts Receivable, Computers, Valuable Papers and Records, General Liability, Employee Benefits, Professional, Umbrella, Hired and Nonownership Auto, Workers Compensation

Other coverages to consider:

Building, Business Income and Extra Expense, Computer Fraud, Forgery, Employment-related Practices, Business Automobile Liability and Physical Damage