Case Study: Tailored Protection for a High-Risk Background Screening Business

Background

The work of a specialized background screening service that provides pre-employment checks for businesses involves accessing and reporting sensitive personal information, placing them in a category of professional service providers with unique liability exposures. Despite their small size, the stakes for the company are high. One wrong report could lead to costly defense, damages, and reputational harm.

The Challenge
When the background screening service came to us, the company already had two existing claims tied to violations of the Fair Credit Reporting Act (FCRA)—a federal law that strictly governs how background checks can be conducted and reported.

In these cases, the plaintiff contested that the information reported to the claimant's potential employer was outdated and inaccurate, according to FCRA regulations, thus resulting in financial loss for the claimant.

To make matters worse, their prior claims history had made it difficult for them to secure comprehensive, affordable coverage. They were being declined or quoted high premiums, effectively becoming the kind of business they help others avoid hiring.

Flow’s Approach
At Flow Specialty Insurance, we believe that even smaller, niche businesses deserve white-glove service and high-quality coverage. In this specific example, a client came to Flow in need of quick turnaround, as no viable options had been secured to date for the applicant. The Flow brokerage team went to work immediately evaluating the risk and identifying the best marketing approach needed to secure the best possible coverage and pricing available. 

After reviewing the go-to-market options, which include API’s, carrier portals, and submitting via email, it was determined that email was the best option due to the loss history and nature of operations. Within 24 hours, Flow was able to obtain multiple options providing favorable terms, conditions, and pricing.  But we didn’t stop at just finding a quote. We also:

• Analyzed specimen policy language across carriers to identify where exclusions might leave them exposed, especially around FCRA violations and third-party liability.
  
  
• Ensured the recommended proposal included tailored professional liability coverage, with carve-backs and enhancements that addressed their exact services and risk profile.
  
  
• Provided insights into risk mitigation strategies, so the client not only received coverage but also learned how to reduce the risk of future claims.
  
  

The Outcome
The background check operator was provided with:

• A professional liability quote designed for their unique industry exposure.
  
  
• Maintained prior acts coverage, preserving the retroactive date to protect against potential unknown incidents that could result in future claims.
  
  
• A reasonable premium, despite their history, thanks to our competitive quoting and advocacy.
  
  
• Confidence that their business is protected against lawsuits from financial loss arising from errors & omissions in their professional services.

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Takeaway

At Flow, we apply the same level of care and expertise to small and mid-sized businesses as others might reserve for billion-dollar market cap clients.

Where many brokers rush to deliver basic coverage, we take time to find value others overlook, empowering agents to win and retain niche accounts with confidence.

If your client operates in a non-standard professional service like background screening, Flow helps you deliver coverage that goes deeper. Our tech-powered efficiencies free us up to do the real work: understanding risks and finding smart protection strategies, regardless of account size.

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