Insurance traps that could cost your recruitment agency

As a people-focussed industry, recruitment agencies thrive on the ability to match up the right talent with the right jobs, keeping both candidates and employers happy. However, with the focus being on finding candidates with the right personal temperament and background for each role, it can be easy to forget about the fine print.

As a recruitment agency, allowing for even the smallest of exceptions could lead to huge implications when it comes to your insurance cover. Take a look at these common insurance oversights which could cost recruitment agencies thousands, so you can be sure not to fall into similar traps.

Common insurance oversights

  1. Non-standard contracts - Be wary of signing non-standard contracts and Terms and Conditions. When signing any contract, it’s important to fully understand the potential liability for your exposure, otherwise you could find yourself open to any number of unseen insurance claims. Always seek assistance from your broker or legal counsel before signing non-standard contracts.
  2. ‘Supplied Personnel exclusion’ - An important loophole to be aware of when signing contracts, ‘Supplied Personnel exclusion’ endorsements relinquish liability by the employer for any workers you supply, making you solely responsible for them during that employment.
  3. Dishonesty claims - Dishonesty is one of the biggest exposures for recruitment agencies, where dishonesty by the temporary worker leads to insurance claims for damage or losses. Check that your insurer provides cover for acts of dishonesty. 
  4. Specialised insurance cover - Specialised insurance policies with umbrella names like ‘cyber cover’ can often be misleading. Never assume an insurance policy is all-encompassing. While some cyber policies may cover everything from cyber extortion to data breach notification, others might be much more limited. Always be aware what risks are included in your policy and which are not.
  5. Healthcare workers – Do you supply workers for healthcare industries? For each professional body you supply, it is important to check exactly what insurance cover they provide your healthcare professionals. Medical insurance claims can be a costly, particularly when it comes to claims in respect of Medical Malpractice.
  6. Offshore workers – There are a number of additional risks incurred when sending workers offshore. In these instances, it is important to get advice from your insurance broker, so you can be sure that you have adequate cover for incidents that may occur.
  7. Height and depth limits – Are you aware of the height and depth limits attached to your insurance policy? If your workers exceed the stated limits in your policy, your insurer could refuse to pay out in the event of a claim, leaving you liable for all costs.

Constantly checking the small print can be time consuming, and may seem trivial when it comes up against keeping clients and candidates happy, but overlooking any one of these insurance traps, could lead to huge financial losses in the event of a claim.