Staffing Agencies · California

Your workers, on someone else's floor.

Coverage for temporary, temp-to-hire and permanent placement agencies across light industrial, clerical, healthcare and professional staffing.

By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched

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How it works

Workers' comp is the core

When your temporary workers are placed with clients, your agency usually carries their workers' comp. Pricing follows the work they actually do at each client, so class codes and job descriptions matter, and carriers look closely at the client mix.

Clients also ask for general liability, professional liability, employment practices and crime coverage for your workers on their premises. I place staffing coverage through specialty staffing programs.

Workers' compTemporary and internal staff, priced by the work performed.
General liabilityClaims arising from your workers at client sites.
Employment practicesClaims from candidates, employees and third parties.
Crime and professionalClient property and placement errors.

Who I help

Agencies that call me

Light industrial staffing

Warehouses and manufacturing clients.

Clerical and professional

Office and administrative placements.

Healthcare staffing

Nurses and caregivers. See details

Permanent placement

Recruiting and search firms. See details

Employee claims

Employment practices liability. See details

Client contracts

Limits and wording clients require. See details

Before you call

What underwriters will ask

Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.

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Operations: types of staffing and industries served.
Payroll: temporary payroll by job type, and internal staff.
Clients: largest clients and what workers do there.
Controls: safety programs and site visits.
Contracts: client insurance requirements.
History: current policies, experience mod and claims.

California's client employer rule: Labor Code 2810.3

In California, Labor Code 2810.3 makes a client employer share with the labor contractor all civil legal responsibility and civil liability for two things: paying the supplied workers' wages, and failing to secure valid workers' comp as Labor Code 3700 requires. That's why I keep your comp certificates and payroll records ready before a client asks.

Who counts, and who doesn't:

Client employer. A business that gets workers from a labor contractor to perform labor within its usual course of business, meaning its regular and customary work, done on its premises or worksite.
Below the line. Excluded: a business with fewer than 25 workers (direct hires and supplied workers counted together), a business with five or fewer supplied workers at any given time, and the state and its political subdivisions.
Workers. The section doesn't reach employees exempt from overtime as executive, administrative or professional employees.
Labor contractor. Anyone who supplies a client employer with workers, with or without a contract. Carved out: bona fide nonprofit community organizations serving workers, union programs and hiring halls under a collective bargaining agreement, motion picture payroll services companies, and certain employee leasing arrangements.

Three more details shape your client contracts. A worker or the worker's representative must notify the client employer at least 30 days before suing it for these violations. The client can't shift its Division 5 workplace safety duties to you. And any waiver of the section is void, though each of you can still enforce lawful contract remedies against the other for liability created by the other's acts. Both of you must give state enforcement agencies, on request, what they need to verify compliance.

Weekly pay for temps: Labor Code 201.3

California has its own payday rule for a temporary services employer: one that supplies workers to clients and does all of these: negotiates terms with clients, assigns and reassigns workers, sets pay, pays from its own accounts, and keeps the right to hire and fire. Bona fide nonprofits that provide temps, farm labor contractors and garment manufacturing contractors are outside the definition.

Weekly, whenever the assignment ends. A worker assigned to a client must be paid at least weekly. Wages for a calendar week are due by the regular payday of the following week, and paying on that schedule counts as timely pay when the assignment ends.
Daily dispatch. Pay is due at the end of each day when the worker reports to your office or another location, is dispatched to a client worksite that day and reports back afterward, unless the work is executive, administrative, professional or clerical.
Trade disputes. If the client is engaged in a trade dispute, pay is due at the end of each day.
Security guards. Registered guards employed by a private patrol operator and assigned to a client are paid at least weekly too.
Discharge and quits. Final pay follows Labor Code 201 for a discharge and 202 for a quit.
Long assignments. For a worker assigned to a client for over 90 consecutive calendar days, the section applies only if you pay that worker weekly under its first paragraph.

A temporary services employer that violates the section faces the civil penalties in Labor Code 203 and any other penalties available at law. Under 2810.3, your clients share that wage exposure.

Two employers, one injured worker: who pays

A placed worker has a general employer (you) and a special employer (the client). California sorts out the comp question with a few rules:

Labor Code 3602(d). A client can secure comp for workers you supply through a valid, enforceable agreement under which you agree to obtain, and actually obtain, comp for them. Both of you are then treated as having secured payment, as long as that coverage stays in effect for the duration of the employment. The agreement can't be made to avoid proper experience rating under Insurance Code 11730(c).
Insurance Code 11663. Between the two employers' insurers, the general employer's insurer is liable for the entire cost of compensation, unless the special employer had the worker on its own payroll at the time of injury. Then the special employer's insurer is solely liable.
Labor Code 3302. When a licensed contractor gets a worker from you for work that needs its contractor's license and supervises that work, you pay comp premiums based on the contractor's experience mod and are solely responsible for that worker's comp. You report monthly payroll, the contractor's name, address and mod, and classifications assigned under the WCIRB's statistical plan. The contractor must tell you if the worker goes onto a public works project or is moved to a different classification.
Classification. The WCIRB's Labor Contractors rule classifies supplied workers as though they were the client's employees, while your own clerical office staff go to Classification 8810 or 8871, subject to the Standard Exceptions rule.

For your workers' comp: put the comp duty in writing in every client agreement, and keep whose payroll the worker is on consistent with the contract.

What I read for in client contracts and policies

Alternate employer endorsement (NCCI WC 00 03 01 A). IRMI says temp agencies commonly use it when a client requires it. The form says Parts One and Two apply as though the scheduled alternate employer is insured, for injuries to your employees in special or temporary employment with it in the state named in its Schedule. NCCI's instructions let the insurer of a temporary-worker supplier list alternate employers as "all" or "any," and allow the form only for states shown in Item 3.A of your Information Page. I check that the assignment state is listed and whether an entry in Schedule Item 3 limits the form to one contract or project. Forms and editions vary by state and insurer, so I read the endorsement actually attached.
Indemnity clauses. I compare what the client's indemnity language asks of you with what your policies are written to answer.
Third-party claims. If a client contract asks for third-party coverage under your EPLI, I check how that policy attaches it; the details are on that page.
Client property. ISO's Clients' Property endorsement (CR 04 01) is designed to add money, securities and other property of a client you serve under a written agreement to a crime policy. In the 08 13 edition FC&S reviewed, it applies only to theft by an identified employee, and an earlier edition was limited to property inside the client's premises, so I check the edition.

Questions

Staffing agency insurance, answered

Who covers workers' comp for temporary workers?

Usually the staffing agency, as the employer of record. Client contracts spell out who carries what.

Why do class codes matter so much?

Workers' comp is priced by the work performed. Placing workers in warehouses costs more than clerical work, so accurate job descriptions keep pricing right.

Do we need employment practices coverage?

Staffing firms face claims from candidates and placed workers, so EPLI is common, and clients often require it.

What do underwriters rate on?

Job types, payroll, client industries, safety controls and claims history.

Does Labor Code 2810.3 apply to PEOs and employee leasing?

The labor contractor definition leaves out a party to an employee leasing arrangement, as defined in the Experience Rating Plan rule the statute cites (one subrule excepted), if that arrangement contractually obligates the client employer to assume all civil legal responsibility and civil liability under the act.

Does an alternate employer endorsement replace the client's own workers' comp?

No. NCCI's WC 00 03 01 A says it is not intended to satisfy the alternate employer's duty to secure its own workers' comp obligations, and the insurer won't file evidence of it for the client with any government agency.

Do you offer staffing agency insurance outside California?

Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.

Official sources

Often placed alongside this

Coverage

Workers’ comp insurance

Required coverage for California employers.

See coverage Coverage

Employment practices liability (EPLI)

Coverage for harassment, discrimination and wrongful termination claims.

See coverage Coverage

General liability insurance

Coverage for injuries and damage your business causes others.

See coverage

By state: Insurance requirements by state

Staffing agency insurance

Tell me about your agency. I'll shop it.

Your payroll by job type and client mix are enough to start.

Get a Quote Call (877) 711-4545

Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.

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