Why Hospitality Staffing Firms Struggle to Secure Workers’ Comp Coverage

The hospitality industry runs on constant motion. Hotels, resorts, restaurants, and event venues rely on a steady stream of workers to handle everything from food service and front desk operations to housekeeping and event setup. For hospitality staffing agencies, this creates steady demand, but it also brings one of the most common and costly challenges in the business: finding dependable workers’ compensation insurance.

Many hospitality staffing firms find that securing workers’ comp coverage is far more difficult than expected. Between high turnover rates, physically demanding roles, and multi-location assignments, insurers often classify these agencies as high-risk. The result is that many are denied coverage altogether, or face unaffordable premiums that make it hard to stay competitive.

At NPN Brokers, we specialize in helping staffing firms in hard-to-insure industries like hospitality obtain the coverage they need quickly and affordably. We understand how to work around the obstacles that drive insurers away and offer flexible options that fit your business. In this guide, we’ll explain why hospitality staffing agencies struggle to get workers’ comp insurance, the unique risk factors involved, and how our team helps firms get covered in as little as 24 hours.

The Nature of Hospitality Staffing Work

Hospitality is one of the most diverse and fast-paced industries in the economy. A single staffing agency might supply housekeepers, banquet servers, bartenders, cooks, and maintenance personnel to multiple hotels, event centers, and restaurants all within the same week. The roles vary widely, the work environments constantly change, and the schedules often shift based on client needs.

For insurers, this combination makes risk difficult to measure. Carriers prefer businesses with stable, predictable operations, where they can clearly assess exposure and safety practices. Hospitality staffing firms, however, often operate under conditions that change daily, with workers spread across multiple worksites they do not directly control.

This dynamic nature is a core reason insurers hesitate to provide coverage. A firm may appear low-risk on paper but have workers placed in physically demanding, injury-prone environments. Even when safety programs are in place, the varied and temporary nature of assignments means the insurer cannot easily evaluate or manage that risk.

High Turnover and Constantly Changing Payroll

Employee turnover is one of the biggest challenges in the hospitality industry. Staffing firms that serve hotels, resorts, and restaurants often experience rapid hiring cycles, especially around holidays or major events. Workers may stay for only a few weeks or months, leaving the agency to continually recruit and onboard new staff.

High turnover means a constant flow of inexperienced workers. New hires may not yet be familiar with safety procedures or the specific requirements of each job, which increases the likelihood of on-the-job injuries. From an insurer’s point of view, that unpredictability translates to higher exposure.

Fluctuating payrolls also complicate matters. Traditional insurance companies typically require an estimated annual payroll to calculate premiums, followed by an audit at the end of the year to determine any adjustments. For hospitality staffing agencies, payroll can change dramatically from one month to the next. During peak season, payroll may double, while slow periods may bring sharp declines. This creates audit headaches, cash flow issues, and frequent disputes over additional premium payments.

At NPN Brokers, we address these challenges through Pay-As-You-Go (PayGo) workers’ comp programs. Instead of paying large deposits or dealing with surprise audit bills, you pay premiums based on your actual payroll each pay period. This approach gives hospitality staffing agencies the flexibility they need to manage costs efficiently and accurately.

The Physical Demands and Safety Risks of Hospitality Work

The hospitality sector includes many physically intensive roles that expose workers to injury risks. Housekeepers lift heavy linens and push carts through long hallways. Kitchen staff face burns, cuts, and slips on wet floors. Banquet workers handle large setups, sometimes in tight or uneven spaces. Even front desk staff and concierges can face repetitive strain injuries from long hours or constant standing.

Because hospitality staffing agencies provide labor for these physically demanding positions, insurers categorize them as high-risk. The more varied the job duties, the harder it is for an insurer to set a fair rate. Carriers often default to conservative underwriting, meaning they either decline the business altogether or assign a higher classification code that drives up premiums.

For example, the difference between class codes for hotel restaurant staff and hotel maintenance personnel may seem small, but each code carries its own rate structure based on historical claim data. Misclassification can lead to overpayment or compliance issues. NPN Brokers helps hospitality staffing agencies ensure that every role is properly classified, which reduces unnecessary costs and prevents disputes later on.

The Multi-Location Challenge

Unlike a traditional business that operates in one location, a hospitality staffing firm sends workers to multiple client sites. Each location has its own safety protocols, management oversight, and physical layout. Because staffing agencies do not control those conditions directly, insurers often see this as a loss of risk management control.

For example, one worker may spend the morning at a hotel banquet hall, then be reassigned to a restaurant kitchen that afternoon. Another may clean rooms at a resort one week and work an event at a convention center the next. The diversity of locations makes it almost impossible for insurers to assess risk consistently.

Traditional carriers are wary of this type of exposure, especially if the staffing firm has little documentation showing the safety standards of each client site. NPN Brokers understands this challenge and works with carriers that are comfortable insuring businesses with multi-location operations. Our programs are specifically designed for staffing agencies that place workers across various hospitality settings.

The Impact of Prior Claims

Even one or two prior claims can make it difficult for a staffing firm to obtain new coverage. Claims are common in the hospitality sector, whether they involve a housekeeper with a back strain or a line cook with a burn injury. Once those claims appear on your loss history, many standard insurance carriers will decline to renew or write a new policy.

At NPN Brokers, we specialize in helping businesses with prior claims get back into compliance and regain affordable coverage. We work with a network of carriers that understand high-risk industries and are willing to write policies for companies that have had claims in the past. By presenting your business accurately and pairing you with the right insurer, we can help you get covered quickly without the red tape or inflated costs.

Multi-State Operations and Compliance Issues

Many hospitality staffing agencies operate across multiple states, particularly those serving hotel chains or event management companies. Unfortunately, not every insurer writes policies in multiple jurisdictions, and managing compliance across state lines can be complex. Each state has its own rules for workers’ comp coverage, filing requirements, and reporting obligations.

NPN Brokers offers nationwide and multi-state workers’ compensation programs that make this process seamless. We ensure that your policy provides consistent coverage wherever your employees work, so you don’t need to manage multiple insurers or juggle separate policies. This simplifies compliance and minimizes the risk of gaps in coverage.

The Cost of Operating Without Coverage

Some staffing firms take the risk of operating without workers’ comp insurance, but the consequences can be severe. In most states, failure to carry coverage is a violation of the law, leading to fines, penalties, or even shutdown orders. More importantly, an uninsured injury can be financially devastating. The agency could be liable for medical expenses, lost wages, and potential lawsuits.

Clients in the hospitality industry also expect proof of insurance before doing business with a staffing firm. Without workers’ comp coverage, your agency may lose out on valuable contracts or long-term client relationships. Maintaining coverage not only protects your employees and your bottom line but also enhances your firm’s reputation as a professional and compliant service provider.

NPN Brokers: Making Workers’ Comp Simple for Hospitality Staffing Firms

At NPN Brokers, we’ve built our reputation on helping staffing agencies secure workers’ comp insurance when others couldn’t. We understand the hospitality industry, and we know the specific challenges your agency faces.

We provide:

• Fast quotes: Receive a workers’ comp quote within minutes.
• Quick coverage: In many cases, policies can be issued within 24 hours.
• Flexible payment options: Pay-As-You-Go programs mean no deposits, no contracts, and no audits.
• Coverage for all risk levels: We work with staffing firms of all sizes, including those with prior claims or high-risk classifications.
• Nationwide programs: Multi-state coverage ensures compliance across all the areas you operate.

Our approach is simple, straightforward, and tailored to your business. We take the time to understand your payroll cycles, job classifications, and operational challenges, then connect you with an insurer that fits your needs.

Understanding Common Workers’ Comp Class Codes in Hospitality Staffing

Accurate class coding is essential for any staffing firm, as it directly affects your premiums and claim management. Some of the most common workers’ comp class codes for hospitality-related roles include:

• 9052 – Hotel Employees: Covers hotel staff such as front desk clerks, maintenance staff, and general service employees.
• 9058 – Hotel Restaurant Employees: Applies to hotel restaurant workers, including cooks, servers, and kitchen helpers.
• 9082 – Restaurant NOC (Not Otherwise Classified): Used for sit-down restaurant staff, caterers, and food service personnel.
• 9083 – Fast Food Restaurant: For quick-service food establishments.
• 9015 – Building or Property Management: Covers janitorial or housekeeping staff who maintain client properties.

NPN Brokers helps ensure that each job type within your staffing agency is assigned the correct class code, preventing overpayment and audit complications.

Reducing Risks and Managing Claims

While workers’ comp insurance covers medical expenses and lost wages for injured workers, managing claims effectively can help keep costs low. Hospitality staffing agencies can reduce claim frequency and severity through proper training, clear communication with client sites, and consistent safety practices.

Common steps include:

• Conducting regular safety orientations for all new employees.
• Requiring client sites to maintain safe, hazard-free environments.
• Reporting injuries promptly to prevent claim escalation.
• Partnering with medical providers familiar with occupational injuries.

NPN Brokers works with carriers that offer claims support and safety resources to help your agency build a safer, more compliant workplace.

The Advantage of Partnering with NPN Brokers

When hospitality staffing firms come to us after being denied coverage, we understand their frustration. Many have been told by traditional insurers that they are “too risky” or “too complex” to insure. Our team takes a different approach. We specialize in these industries because we know that with the right program and carrier, every business can be covered.

We don’t require long-term commitments, large deposits, or extensive audits. Instead, we provide the flexibility, speed, and reliability that staffing agencies need to operate confidently. Our team is dedicated to helping you secure the protection your business deserves so you can focus on serving your clients and growing your agency.

Get a Workers’ Comp Quote for Your Hospitality Staffing Firm

If your hospitality staffing agency is struggling to find workers’ comp coverage or has been denied by traditional carriers, NPN Brokers can help. We make the process simple, fast, and affordable.

Call us today at (561) 990-3022 to receive a workers’ compensation quote within minutes, or fill out our online quote request form to get started. We can often have coverage active within 24 hours so your agency can stay compliant and protected.