Insurance essentials for your recruitment business

Every business has its priorities for what is considered ‘business critical’, unfortunately insurance isn’t always at the top of that list! However, leaving it to the last minute could leave you with gaps in your recruitment agency insurance policy. With so many different options and packages out there, how do you know what cover is essential for your recruitment business?

Typical recruitment agency insurance mistakes

There are a number of typical pitfalls that all recruitment businesses may fall into when it comes to insurance. The first being; rushing into it. And the second; failing to seek advice from an insurance adviser.

When to start looking for recruitment agency insurance

• Leaving your recruitment insurance cover to the last minute could see you rushing into policies without first checking that they’re suitable for your business. 
• If you are a new recruitment business it is a good idea to get your insurance pinned down early – even before you submit your first tender. That way, not only will you be able to find the cover best suited to your business needs, but it will ensure that you’re covered for all your work right from the get-go.  
• If you are an established business, don’t leave getting an alternative renewal quote too late. You’re unlikely to get the most favourable responses from insurers.

Where to look for recruitment insurance

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. Purchasing your insurance online will rarely give you a policy suited to all of your business needs. 

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

What insurance does a recruitment agency need?

An experienced broker can help you create a specialised recruitment insurance policy to protect your business against additional, specific risks. 

Below are just some of the additional types of cover to consider:

• Vicarious Liability
  Protects you should claims be made against you for the actions of temps or contractors.
• Cyber and Data Cover/Cyber Liability
  To help protect your business against the financial and reputational impact should your business suffer a cyber-attack or data breach. 
• Driver’s Negligence
  For businesses specialising in driver recruitment, provides cover should the supplied driver damage the vehicle being driven.
• Medical Malpractice Liability
  It provides cover for claims brought against you, arising from medical or veterinary treatment, diagnosis or prescription by anyone you supply to a client under contract.
• Directors' and Officers' Insurance
  This provides protection for your management level staff. It protects them in respect of the legal costs for allegations of committing a wrongful act whilst employed by the company. 

What are the standard recruitment agency insurance covers?

Not all of the above options will be relevant for every recruiter. However, there are some types of recruitment insurance cover which are considered essential, whatever your recruitment specialty.  

• Professional Indemnity
  Protection for claims made against your company for negligent acts or errors made by you or your staff. For claims against temps or contractors provided by you, you would need to have Vicarious Liability cover, as outlined above.
• Public Liability
  Covering you in the event of an accident or injury caused to a third party or any property damage leading to claims for compensation. This policy includes cover for your placed temps or contractors.
• Employers' Liability
  Under the Employer’s Liability Act 1969, it is a legal requirement for all employers to have Employer’s Liability cover in place. Similar to Public Liability, this cover is designed to protect you and your staff in the event of accident or injury as a result of your day-to-day working duties. 

Starting a recruitment company from home

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

• When operating your business from home you will 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 are operating your business using a personal computer which is not ‘company owned,’ you will need make sure it is covered by your home insurance, and not through any business insurance you may arrange.

It’s never too early to start considering your recruitment agency insurance options. As a recruiter, it is 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.