Holiday Hiring Tips for Small Businesses: An Insurance & Risk Management Perspective

The holiday season often brings a surge in business activity—and with it, the need for seasonal employees. While hiring temporary staff can help meet demand, it also introduces unique insurance and risk-management challenges. Taking the right precautions can help small business owners stay compliant, reduce liability, and protect their operations.

Here are practical hiring tips from an insurance and risk-management perspective to guide you through the seasonal rush.

1. Verify Employment Classification Early

Misclassifying workers—especially seasonal hires—as independent contractors can create workers’ compensation gaps and liability issues.

Tip:
Classify holiday staff as W-2 employees if your business controls their schedule, training, and duties. Misclassification can lead to denied claims or costly penalties.

2. Confirm Workers’ Compensation Coverage Is Adequate

Most states require workers’ compensation for seasonal or part-time employees.

Tip:

• Notify your insurance carrier about expected staffing increases.

• Update payroll estimates to avoid premium audit surprises.

• Ask your agent if temporary coverage increases are needed.

3. Conduct Background Checks Where Necessary

Hiring individuals with histories of theft, fraud, or violence can raise general liability and crime risk.

Tip:

• Run background checks for roles handling cash, inventory, or customer interactions.

• Ensure compliance with FCRA and consent regulations.

4. Provide Proper Training—Even for Short-Term Workers

Many holiday-season claims stem from untrained staff.

Tip:

• Train seasonal hires on safety, equipment use, and customer interaction.

• Document all training; it supports insurance claims and regulatory compliance.
  Common areas to cover:

• Lifting and stocking procedures

• Slip, trip, and fall prevention

• Cash handling and cybersecurity basics

5. Review EPLI (Employment Practices Liability Insurance) Needs

Bringing on a temporary workforce increases the risk of:

• Wrongful termination claims

• Harassment complaints

• Discrimination allegations

• Wage and hour disputes

Tip:
If you don’t already have EPLI, consider adding it before hiring seasonal employees.

6. Update Your Employee Handbook & Policies

Seasonal staff should follow the same standards as full-time employees.

Tip:

• Ensure policies cover overtime, attendance, holiday schedules, and anti-harassment rules.

• Provide seasonal hires with a condensed version so expectations are clear.

7. Ensure General Liability and Commercial Auto

Policies Reflect New Exposure

More staff often means more customers and increased risk.

Tip:
Notify your agent if holiday operations include:

• Delivery services

• Increased foot traffic

• Pop-up locations

Adjusting coverage proactively helps avoid gaps during peak season.

8. Protect Against Employee Theft & Fraud

Seasonal hiring increases inventory shrink and cash-handling risks.

Tip:

• Consider Employee Dishonesty / Crime Insurance (usually a small add-on).

• Implement dual-control procedures for cash and inventory.

9. Consider Temporary Employees Through a Staffing Agency

If hiring is extensive, staffing agencies can reduce insurance exposure.

Tip:

• Clarify who provides workers’ compensation: your business or the agency.

• Confirm liability coverage—sometimes shared, sometimes fully covered by the agency.
  Using a staffing agency can reduce administrative burden and insurance risks.

10. Maintain Clear Documentation

Good records protect your business from claims and lawsuits.

Tip:
Keep documentation of:

• Signed policies and training forms

• Time records for wage compliance

• Incident reports

• Job descriptions

Proper documentation ensures you are prepared in the event of an insurance claim or legal dispute.

Final Thoughts

Holiday hiring can be a boost to your small business—but it also comes with unique risks. By following these insurance and risk-management tips, you can stay compliant, protect your business, and make the seasonal hiring process smoother and safer.

Building a seasonal hiring plan with insurance and risk considerations in mind isn’t just smart—it’s essential for small business success during the busiest time of the year.