What Insurance Does a Medical Staffing Agency Need?

The short answer: Medical staffing agencies place workers into facilities they don't control, so their liability often extends into environments run by someone else. Core coverages typically include general liability, professional liability written for staffing (with negligent credentialing), workers' compensation and EPLI. Facilities that contract with staffing agencies usually require proof of specific coverages and limits before accepting placements, so keep documentation ready and make sure your coverage matches what those contracts require.

Medical staffing firms sit in the middle of a three-way relationship between your firm, the clinician and the facility. When something goes wrong at the bedside, all three can be named. That's why staffing insurance looks different from a typical clinic's program, and why facility contracts scrutinize it so closely.

Professional liability with negligent credentialing

Your professional liability policy should do two things:

1. Cover the clinicians you place (or at least the firm's vicarious liability for their work), and
2. Cover negligent credentialing: claims that you failed to properly verify a clinician's license, certifications, background, references, competency or health screening.

Negligent credentialing claims usually follow a serious patient injury. The facility's attorneys will ask how your firm vetted the clinician, and if a license had lapsed or a reference wasn't checked, your firm becomes a target. Not every professional liability policy covers this, and some sublimit it. Read the wording.

Strengthen your position by documenting:

• Primary-source license verification and expiration tracking
• Background checks, OIG/SAM exclusion screening and drug testing
• Skills checklists and competency testing
• Reference checks and work history verification

Carriers price your credentialing process, so a strong, documented process lowers premiums.

Workers' compensation for placed clinicians

Workers' comp is usually the largest premium for a staffing firm, and the easiest to get wrong.

• Every state matters. Your policy needs to cover each state where clinicians actually work, not just where your office is.
• Monopolistic states. Washington (and a few states outside our footprint) require coverage through the state fund. Your private policy won't cover Washington payroll, so set up an L&I account and add stop-gap employer's liability.
• Class codes. Staffing payroll is classified by the work clinicians perform. Misclassification leads to painful audit adjustments.
• 1099 travelers. If you treat travelers as independent contractors, understand the risk. California's AB5 ABC test makes 1099 status very hard to defend for clinicians, and a reclassified injured worker means an uninsured claim.

General liability, EPLI and umbrella

• General liability is required by every MSA. Expect additional insured, primary & non-contributory and waiver of subrogation requirements.
• EPLI for staffing should include placed/temporary workers in the definition of employee and cover third-party claims, such as a patient alleging harassment by a placed clinician.
• Umbrella/excess is the efficient way to reach the higher limits hospitals and larger health systems require, often $3 million to $10 million or more.

Reading facility contracts (MSAs)

Before you sign an MSA or join a VMS program, check the insurance section for:

We review contracts as part of our service. Our free contract requirements checker is a quick way to start.

Certificates of insurance, fast

Facilities won't let a clinician start without a current certificate. Misty coordinates certificate issuance and additional insured management for clients, so you can respond to contract requirements quickly, and clients can request certificates any time from the client portal.

The bottom line

Staffing insurance works when the policies are written for staffing: negligent credentialing, placed workers, multi-state comp and contract-ready certificates. If you're not sure your current program does all of that, a free second-opinion review takes less than an hour of your time.