vendor management services

Insurance Solutions for VMS and MSP Agencies

As a managed services provider, your business model brings with it a complicated risk picture. Such a specialized collection of liability sources also requires a sophisticated risk management strategy to protect you, your vendors and your clients. From general liability to cyber coverage, your insurance policies should be crafted to safeguard your vendor management services firm from serious fiduciary losses.

Multifaceted Strategies for Protection

It’s easy to think of liability in terms of traditional types of exposures, such as automobile accidents, on-the-job incidents or property damage. Of course, there are also issues of fiduciary responsibility and duty of care, particularly when it comes to managing investments, health programs or employee benefits, and claims that may arise based on negligence or intentionally abusive acts. Multiply all these by the number of clients you serve and vendors you’ve partnered with, and you can see why your potential liability can grow exponentially. Your insurance should take all these into account, providing specific kinds of claims protection such as:

  • Cybersecurity and privacy coverage
  • Abusive acts liability
  • Employment practices liability
  • Fiduciary liability
  • Hired and non-owned auto coverage
  • Property and inland marine

Putting the Pieces Together

A staffing insurance firm providing flexible options can craft a customized coverage package for your business. With the right combination of products, indemnity protection for your vendor management services company becomes greater than the sum of its parts.

The Benefits and Risks of Vendor Management

Vendor management services have become a common approach to staffing contingent or temporary workers. These automated or otherwise outsourced systems assist staffing firms with the recruitment, screening, placement, and management of workers. When a firm outsources vendor management, it is vital that all requirements for staffing insurance continue to be met. These services could otherwise expose the staffing firm to risk or cause gaps in insurance coverage for contingent workers.

Could Vendor Management Introduce New Risks?

Many contracts between vendor management and staffing firms require that the latter assume full liability for the recruitment, screening, and placement of workers through the external service. If a vendor management provider alters or varies from the procedures of an insured staffing firm, they may introduce new risks to an operation that would otherwise be protected. Some providers of staffing insurance offer additional services related to due diligence and oversight to assist agencies or firms entering into vendor management partnerships.

Staffing Insurance and Vendor Management

It may be beneficial for an insurance provider to oversee vendor management and ensure that the priorities of reducing risk and preserving protection from liabilities remain foremost. Staffing firms and vendor management services should work together to make sure that firms do not fall short of insurance plan requirements.