Insurance for recruitment agencies

Employers liability insurance: It’s a legal requirement for recruitment agencies with one or more employees to possess employers liability insurance. However, there are some exceptions, such as if you only employ a family member. Please visit the gov.uk website for more details.  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.

Usually when Class I HGV drivers are supplied and the hirer requires you to have the cover. However, it does not cover road risks required by law. These are still the responsibility of the legal owner or registered keeper of the vehicle under their normal motor cover. Drivers' negligence insurance cover is limited to a specific amount e.g. £10,000 per claim, and subject to a limit of £50,000 in the year. The cover could be affected by the age, experience, or convictions of the driver, so it is vital such details are investigated before the driver is supplied. Remember it is not essential to cover every driver on your books, only those supplied on contracts requiring drivers' negligence cover.

Does my insurance policy cover international placements for employers liability, public liability and professional indemnity?

Employers 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.

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. You should also consider cyber insurance as you’ll rely on technology to collect and store candidate data. Even with firewalls and virus scanners, your business is constantly at risk from cyber threats, including those caused by human error. 

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.

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?