Words Matter: A Waiver of What?

You have been asked for these to be added to certificates of insurance, but what exactly does it do?  A waiver of subrogation prohibits your insurance company from suing your client.  Normally, if a client is sued they don't remain a client for long.  The insurance company will charge 3-5% to waive their right to subrogate (sue your client for damages).  

The waiver does NOT however restrict your employee from suing your client.  If your employee does sue your client, your insurance company can still file a lien (sue) your employee to recover some damages.  Your additional insured endorsement may or may not respond to defend your client depending upon the wording of your general liability policy.

Also, the waiver does not restrict your ability to sue your client.  Only your contract with a hold harmless agreement would restrict your ability to sue.  So, in summary, you can pay your insurance company not to sue and promise yourself through contract as well.

Words matter; on insurance policies, certificates and contracts. 

How Big is Your Office?

This is a question Staffing Firms should never be asked by their insurance company.  Years ago insurance companies thought employment agencies were merely head hunters.  There was not much exposure since the agencies simply introduced people to businesses for a fee.  The staffing world has evolved to include PEOs, Staffing Firms, Contract Labor, Nurse Registries and more.  Your exposure is now a function of your sales and payroll rather than how many people can fit in your office.

Some insurance policies for staffing firms are mistakenly written based upon the square footage even today.  These policies will not pay losses related to professional, employment, fiduciary or other liabilities.  Proper coverage at the time of loss will protect both you and your client.  Your insurance policy is written by, priced by and interpreted by the insurance company.  Don't give them an easy way to deny a claim by having the wrong policy. 

If you would like to know if your policy is right, email a copy of your certificate insurance for a free review.

michael.hrovat@hubinternational.com

You're Fired!

Rough words.  We have all been fired by clients at times.  I was fired once because I would not buy season passes to the Lakers.  My client wanted vendors and consultants who would shower him with gifts.

Question:  Have you ever fired a client?  Has a client ever asked you to do something that you could not do financially, ethically or morally?  Do you have a client that if all of your other clients mimicked would close your doors?  Granted, if long term potentials make it worthwhile to you, we all can ride it out.

Businesses look at their vendors, suppliers and consultants and determine which should be fired.  I challenge you to look at your clients and see if their payment history, work comp injuries or other issues are grounds for termination.

A former manager and mentor told me once, you run your own business; it is called Me, Incorporated.

New Opportunities for Staffing Firms

Businesses once looked at Staffing Firms as sources of disposable labor.  Safety was ignored to the point that even fireworks companies would hire temps to launch rockets.  In the 1990's we saw growth in skilled and even professional staffing.  Recently I have seen postings for contract labor restaurant managers paying $90,000 and financial positions paying nearly $200,000 a year.  I had a conversation with a firm that was going to place project managers to oversee the construction of energy plants.  We have come a long way.

If your marketing reps are only calling on logistics companies, you are missing the boat; and profits too.  School Districts are outsourcing their crossing guards for goodness sake!  Municipalities and other Public Entities are usually unionized and now must adjust their staff due to lower tax revenues and the Affordable Care Act.

Professional placements offer higher margins and less Work Comp risk.  The labor market is in flux and the creative Staffing Firms will seize this as an opportunity.

Staffing and The Affordable Care Act

Staffing and The Affordable Care Act

Staffing firms are realizing significant growth nationwide due in part to the distortions caused by the ACA.

• Client companies are attempting to stay under 50 employees.
• Larger clients are outsourcing to avoid healthcare costs for all labor.
• Staffing firms can create "virtual carve-outs"

According to some studies, the Staffing Industry has almost returned to pre-recession payroll levels.  These are all great shifts allowing the Staffing Industry to grow.  The use of a Staffing Firm is a legitimate and sound method of Risk Transfer.  The clients are now transferring their real or perceived ACA risk to the Staffing Industry.

The question remains, "what happens next?"  We will not return to the health system we had in 2005.  We will not keep the the current ACA as it is neither politically or economically sustainable.  No one knows what the future system may look like.  It may be a single-payer plan or an HSA based private/public hybrid.  Staffing may or may not be an effective risk transfer method in 2034, but as far as 2014 is concerned it makes a lot of sense.