Recruitment agencies’ insurance requirements are similar to those of other businesses. However, as an organisation that provides professional services and may employ or place temporary workers, you may wish to arrange specialist insurance to protect against the risks associated to these activities. Whilst you may get adequate cover from a ‘standard’ commercial combined insurance policy that is aimed at all businesses, specialist insurance may provide more comprehensive or suitable cover for your recruitment activities.Recruitment agencies’ insurance needs are like those of other businesses. However, as an organisation that provides professional services and may employ or place temporary workers, you may wish to arrange specialist insurance to protect against the risks associated to these activities. Whilst you may get adequate cover from a ‘standard’ commercial combined insurance policy that is aimed at all businesses, specialist insurance may provide more comprehensive or suitable cover that will better match your recruitment insurance requirements.
Let’s start with the basics – what is legally required? All employers (this definition of employees can help you determine if this means you) are required to have Employers’ Liability insurance. Employers’ Liability protects you from claims made by your employees that arise due to your negligence. If you operate motor vehicles, you are also legally obliged to insure them too.
Public and Products Liability is almost always recommended. Public Liability provides cover for claims made against you by third parties for accidental damage or injury; Products Liability covers you if a product you sell or supply causes injury or damage. These two are often packaged together.
You’ll probably also want to insure your property, contents, assets and money as well – this is covered by Property Damage (also known as Buildings insurance and Contents insurance). When calculating the sums insured for your contents and assets, ensure that you’re considering the replacement value and not the value written in your accounts, which will generally include deprecation. To be covered under these insurances, you may have to comply with some conditions – for instance regarding security and occupation – so make certain that you are aware of these and follow them diligently.
Management Liabilities is a broad area of insurance that is particularly relevant for recruitment agencies; depending on your size and complexity and type of recruitment, you may consider one or all of the following…
Professional Indemnity insurance, which protects against claims when your wrongful acts (typically negligence or breaches of duty) have led to a loss for someone who was relying on you to exercise reasonable skill and care in providing a professional service. In the case of recruitment, you’re providing a professional service and a failure by your organisation may lead to a claim from a client or candidate.
Directors and Officers (D&O) can cover you for claims against your recruitment agency, the individual directors and managers, or both, due to errors and omissions by the senior leadership of your business. This may include mismanagement of money, poor decision making or strategic errors that lead to losses for a client or candidate.
Vicarious Liability is the legal responsibility that your entity will have for the actions (or non-actions) of a person who works on your behalf and this may include temporary workers that you provide to a client. Often Vicarious Liability is only required if you are contractually responsible for the workers that you place, and thus may be liable for losses caused by said workers.
Fidelity Bonding provides insurance for your recruitment agency for any loss suffered by your client caused by the dishonest acts of a temporary worker that you supplied, such as theft or fraud. Sometimes this cover will be specifically requested by your client and is common when providing temporary warehouse staff who will be handling attractive stock.
In addition to these insurances, you may choose to look into emerging insurance covers such as Cyber Liability and Data Risks insurance. Your broker or insurer can advise on what non-standard insurances your business may be suited to.
These individual types of cover can be available to you in one policy, such as RecruiterCover Commercial Combined Insurance. By having a commercial combined insurance policy, you are only dealing with a single point of contact and a single renewal date, and you can usually also save money on your premium. You also reduce the risk of having an overlap in cover between two policies held with different insurers, which can cause issues in the event of a claim.
If you would like to discuss your insurance needs or get a free review of your current insurance arrangements, please contact RecruiterCover today on 0333 800 1945.