Recruitment agency insurance

It is the extension of your policy to cover the actions of the worker you supply, as if the temporary worker was your employee. Usually the demand for this is created by the hirer's non-standard terms and conditions. So, it is important to check with your broker that there is no contract liability exclusion, as without removing the exclusion it would rule out the extension of cover.

Firstly check the contractor has their own policy, that it is fit for purpose and that they maintain it for the duration of the contract. Secondly, ask for a copy of their schedule of insurance, and ensure it is renewed if it expires during the contract.

As your company name is on the contract with the hirer, the hirer will likely pursue you in the first instance when there is a negligent act, error or omission by the contractor you supplied that costs the hirer money. Furthermore, can you be certain that the contractor has bought adequate insurance cover for themselves? For instance, have they

• paid their premium?
• renewed their policy?
• got an adequate indemnity limit on their policy?
• where required, extended their cover for off-shore work, rail or drivers' negligence?
• not cancelled their policy after commencement of the assignment?

If yours is a new recruitment business, it’s a good idea to get your insurance pinned down early – even before you submit your first tender. That way, you’ll be able to find the cover best suited to your business needs and ensure that you’re covered for all your work right from the get-go.

For established recruitment businesses, it’s a similar story. Don’t leave getting alternative renewal quotes until too late as you’re unlikely to get the most favourable responses from insurers at the last minute.

Quite simply, it’s never too early to start considering your recruitment agency insurance options. As a recruiter, it’s likely that your business will benefit from cover outside of standard policies. Make sure you speak to a broker who specialises in your industry, to ensure you have the right protection for your business.

Some policies specifically exclude these types of risks, so you need to ask insurers to extend the cover, which will usually be an additional cost.

It can't usually be purchased as a stand-alone cover. It is usually available as an extension to a public liability insurance policy.

There are a number of typical pitfalls that all recruitment businesses may fall into when it comes to insurance, but the most common mistakes are:

• Leaving your recruitment agency insurance cover to the last minute: Leaving it late could see you rushing into policies without first checking that they’re suitable for your business. As a result, you could be left with gaps in your recruitment agency insurance policy that can leave you exposed at the worst possible time.
• Failing to seek advice from a recruitment agency insurance adviser: Recruitment agency risks can be wide ranging and complex, from potential liabilities to data breaches and cyberattacks. It’s crucial to understand these risks before buying insurance. An expert broker can work with you to make sure the recruitment agency insurance you buy is suitable for your business and provides the right protection.
• That the personal services company contractors supplied will carry their own insurances, and that they will be adequate for the contract. As the recruiters name is on the contract with the hirer, they should protect their own risks first and then, insurers can try to recover the loss from the negligent contractor if possible.

In all the stress of running a recruitment business it can be easy to slip into the trap of purchasing your recruitment agency insurance online for the sake of ease. However, online business insurance policies are generally only designed to cover standard risks, so purchasing your insurance online will rarely give you a policy suited to all of your business needs. Online insurance policies will often exclude cover for personnel supplied under contract, so where you accept hirers’ terms and conditions, an extension of cover is required (see vicarious liability cover above).

In order to get the most effective recruitment insurance for your business, you should speak to a broker who understands your industry risks and can give you expert advice.

If you’re starting a recruitment agency from home, there’re a couple of other things to consider when it comes to your recruitment agency insurance arrangements:

• When operating your business from home you’ll need to let your home insurer know, as this is considered a ‘material fact’ and will need to be disclosed. You may otherwise run the risk of invalidating your home insurance.
• If you’re operating your business using a personal computer which is not ‘company owned’, you’ll need to make sure it’s covered by your home insurance.

Employer's liability usually provides cover for UK nationals, applicable under UK law. For non-UK nationals, they can be covered under the policy dependent on their duration of stay in the UK. UK nationals working overseas are covered by their UK policy.

Employers liability insurance: It’s a legal requirement for recruitment agencies with one or more employees to possess employers liability insurance. This cover helps protect your business by covering the costs in case an employee is injured or falls ill while working for your agency.

Public liability insurance: In the event a member of the public sustains bodily injury, death, or experiences property loss or damage, your business could be held legally responsible for any resulting claims. Public liability insurance financially safeguards your agency in these situations.

Professional indemnity insurance: We strongly recommend that recruitment agencies offering direct services or providing advice to clients take out professional indemnity insurance. This type of cover assists in covering the costs associated with claims for breach of duty, errors, omissions, or negligent advice that may result in financial losses for your clients.

Legal expenses insurance, also known as legal protection insurance, helps with the costs of legal matters.

If you have a legal problem, the insurance company will help pay for the legal costs involved. This can include things like paying for a lawyer, court fees, and even for experts who might be needed for your case. Some policies might also cover the costs of mediation or arbitration.

Whether or not you need legal expenses insurance depends on your own situation and how comfortable you are with taking risks. Legal disputes can be expensive and time-consuming, so having this type of insurance can give you peace of mind and protect you financially.

To figure out if legal expenses insurance is right for you, it's a good idea to talk to an insurance expert. They can look at your specific situation and give you advice based on your needs.