Insurance Considerations for Background Screening Companies

Posted on July 20, 2020 by admin
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There are many things for background screening companies to consider when they’re searching for the right insurance. The background screening industry and its vendors face many unique risks that require flexible and responsive protections, especially relating to technology errors and omissions and cybersecurity coverage. Background screening companies should consider coverages that are exclusive and unique to secure this specific niche industry properly. A specialized industry requires specialized coverage, and Rooney insurance offers top-notch insurance products created for businesses in this market.

Risks and Challenges of the Background Screening Industry

It is prevalent for employers to mandate background checks throughout the employee recruitment process. These checks could be relating to financial means, criminal histories, and communication with the potential employee’s former employers. To begin background screening, employers generally use a third-party background screening service provider to maintain a neutral stance.

Even if these screening entities and the vendors provide services that meet all the various state and federal guidelines, their operational risks are quite high. Background screening companies are all too commonly hit with liability claims, especially in the realm of employee exclusion and discrimination claims. These legal claims and settlements can be financially devastating, even when the lawsuits are unfounded as defending claims in court can cost thousands or even millions of dollars.

Importance of E&O Insurance

Errors & Omissions (E&O) insurance is designed to protect a business and its assets from loss. It is a specialized policy that covers the costs relating to civil legal claims and the associated damages and settlements of those cases. Just about every business should be equipped with professional liability insurance to properly protect the inevitable and the unexpected. Errors and omissions insurance is the most critical line of coverage for screening companies. It will defend violations of the Fair Credit Reporting Act (FCRA) and similar state and local laws. A comprehensive policy will also protect against governmental fines, fees, penalties, and investigations, which allows for a bodily injury carve-back for mental and emotional distress.

It is increasingly vital that you have an agent who understands the industry. Rooney’s experience in the industry has afforded them the ability to provide these specialized coverages with the utmost confidence. The risk of claims is inherent in the background screening industry for company executives and staff members. Therefore, it is crucial for those in the qualifying background screening and vendor fields to secure E&O insurance before they experience a claim.

About Rooney Insurance Agency

Rooney Insurance Agency, established in Tulsa, Oklahoma in 1960, has provided customized business and personal insurance and employee benefits solutions to individuals and businesses in the state of Oklahoma and throughout the United States. We work to ensure that each client’s insurance coverage fits their specific needs, addresses their key risks, and protects their valuable assets. For more information on how we can help you today, contact us at (918) 582-0565.