An Introduction to Recruitment Agency Insurance
Let’s start with the basics - the sections of cover that are legally required. All employers (and this is the definition of employees used to determine who is an employer) are required to have Employers’ Liability insurance. Employers’ Liability protects your agency from claims made by your own employees that arise due to your negligence. Another legally-required insurance is, if you own and operate motor vehicles on public roads, you are required to insure those vehicles.
Public and Products Liability is recommended from day one of operating as a business. 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 insurances are often packaged together.
You’ll likely want to insure your property, contents, assets and money as well – this is covered by property damage (or buildings insurance) and contents insurance. Don’t forget, when calculating your sums insured for your contents and assets, ensure that you’re considering the full replacement value (and not the value written in your accounts, which will generally include deprecation). Your property and content sections may require you to comply with some conditions – for instance regarding security and occupation – so make certain that you are aware of these and follow them diligently.
In addition to these types of cover, there are several other insurances that can help protect your organisation. Management Liabilities is a broad area of insurance that is particularly pertinent to recruitment businesses; depending on your size, complexity and type of recruitment, you may consider one or all of the following…
Professional Indemnity protects you against claims that your wrongful acts (typically negligent acts or breaches of duty) have led to someone suffering loss where they were relying on you to exercise reasonable skill and care in providing professional, advisory, design, counselling, sign-posting and other services requiring skill and care. 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 protects from a claim 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.
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.
These individual types of cover are all available to you in one policy, such as RecruiterCover Commercial Combined Insurance. By combining these insurances into one 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 practices, please contact RecruiterCover today on 0333 800 1945.