Hand signing a contract

Reviewing Staffing Agency Contracts from an Insurance Perspective

Christina Nechiporchik News

Staffing shortages continue to dominate the industry rendering it difficult for post-acute care providers to maintain consistent levels of staff and quality care. To ease the staffing burden, providers are requesting assistance from staffing agencies. While this is an efficient solution, providers should try and avoid some common pitfalls when it comes to signing staffing agreements.

Reviewing the indemnification and insurance provisions of the contract should be a priority. A provider should ensure that it is listed as an additional insured on the staffing company’s insurance policies. Additionally, the staffing company should be required to carry commercial general liability insurance, professional liability and workers’ compensation insurance. Some staffing companies may only carry CGL insurance, which is insufficient for the long-term industry where the focus is providing professional services. It is crucial that the staffing agency agrees to indemnify the provider for its negligence for any of the services and tasks the agency agrees to provide. A provider should be wary of any indemnification provision that requires the agency’s negligence to be the “sole cause” (or similar restrictive language) of the accident or injury at issue.

Although it may not seem like an option, contracts are negotiable. A provider should not sign a contract without ensuring the terms are agreeable to both parties. Negotiating a clear scope of duties and responsibilities between the agency and the provider is necessary. Delineating the scope of duties may help a provider refute arguments that it is the temporary employee’s employer or joint employer, thereby potentially reducing the provider’s liability depending upon the allegations in a claim.

For additional guidance on staffing agency contracts and negotiating the scope of duties, please refer to our blog post from last week. You can also view our infographic, 6 Tips for Negotiating Temporary Staffing Contracts available from our Resource & Education Center.