Life as a self-employed Recruitment Consultant or Headhunter is hectic, and you are often spinning many plates and running from deal to deal. Business Insurance is hardly likely to be the topic that fuels your Adrenalin!
Nevertheless, insurance is a critical element in protecting your business from adversity, it’s all too easy to miss an area of risk until you suffer a loss and then find out it’s not covered!
Our “Health Check” series examines the typical areas of cover which you may need to consider as a recruiter or headhunter.
Professional Indemnity Insurance
PI Insurance is a vital element for any recruiter, if you contract to larger firms, or are on preferred supplier lists, it is highly likely that you will be required to provide proof of cover as part of any procurement process.
As an expert in your profession, the law dictates that you have an increased duty of care to your clients. This means you have increased responsibility for the advice you give.
Professional Indemnity for recruitment consultants provides protection against claims for professional negligence or breach of duty of care.
More comprehensive indemnity policies will extend to cover full civil liability protection which includes cover for issues such as those arising from alleged contractual failures or contract disputes.
This is highly recommended for recruitment consultants. Many potential claims begin from an allegation that a contractual obligation has not been met or is being challenged.
Typical claims from recruitment agents include:
- Misrepresentation: For example; Incorrect referencing of a candidate where the employer later discovers that qualifications are not valid and they are not suitable for the position.
- Negligence: A general allegation of negligence, or simply where outcomes are not in line with client expectations, can result in fees being withheld and a dispute.
Potentially a whole topic on all its own, this extension of Professional Indemnity cover is particularly important if you deal in the placement of temporary staff.
Vicarious liability provides cover in circumstances where you could be liable for the actions of others, i.e. being held responsible for the actions of the staff that you have placed.
For example, if you place a temporary accounts clerk into a role, and they make incorrect payments or ledger entries, the employer may hold you responsible.
For instance, if they judge that the candidate did not have the right skills for the role and that you are vicariously liable for their loss.
Public Liability Insurance
Public Liability protects your legal liability against claims for injury or damage as a result of the actions of you (or one of your employees) in the course of carrying out your work.
Chances are, clients or members of the public may come to your office, or your visit them, in connection with your role, and if so, you will require Public Liability cover.
For example, a prospective candidate trips over a loose doormat, or slips on the wet floor, and breaks their ankle.
Employers Liability Insurance
If you have any employees, no matter how infrequent or casual, you are required by law to purchase Employers Liability cover, this will indemnity you should an employee be injured during, or as a result of, their employment.
For example, your administration assistant falls off a step-ladder while putting job cards in your window and suffers a broken arm.
Office / Premises
If you own office premises, then you will need to cover computer equipment, contents and any fixtures and fittings.
Cover can be extended to cover portable electronic equipment such as laptops, tablets or smartphones while away from the premises.
An office insurance package policy can cover all of your critical requirements, including business interruption cover for loss of profits or income following a claim.
If you operate as a mobile business, you likely operate from home, and you may have a dedicated home office.
Specialist home business policies are available, but you may find that your existing home insurance can be extended to cover business items without additional charge.
If you are involved in the placement of “Professional Drivers”, for example, those with an LGV licence or above, then you may want to consider Drivers Negligence cover.
This is an important safeguard, providing cover for damage to the end clients' vehicle whereby the placed driver has been at fault.
For example, they reverse into a post or drive into a height restriction barrier which is deemed negligence based on their status as a driving professional.
Motor Fleet Insurance or Business Car
Your car is effectively a tool-of-trade, and the key is making sure that your motor policy includes the appropriate level of business use.
If you operate two or more vehicles, you could save money by combining all your vehicles onto a fleet insurance policy, this is ideal if you are looking to add further vehicles as your business expands.
Specialist mini-bus insurance or crew-bus cover is also available if you transport temporary staff to an employer's premises.
Personal Accident and Sickness
If you are injured or fall ill, either job related or through another activity such as sport, you may not be able to work, and this will directly impact your income.
A personal accident and sickness policy will provide a lump sum payment for permanent illness or injuries (such as a loss of limb) and a weekly benefit payment for temporary incidents (for example a broken leg during 5-a-side a football).
Cyber Liability Insurance
Cyber Liability Insurance offers protection against data breach and hacking, and a comprehensive suite of covers can be arranged to accommodate most exposures, including:
- Third-party liabilities following a breach of privacy/confidentiality, or transmission of a virus
- Crisis Management & PR Costs following a loss
- System and communication rectification Cover – Repairing systems and reinstating data as quickly and effectively as possible can generate high cost. A Cyber Liability policy will enable you to restore the system as soon as possible to get you back trading.
- Intellectual Property (IP) Infringement – Should you accidentally breach a third-party trademark or copyright.
- Privacy Breach and Regulatory Costs – Some data breaches can incur potential investigation costs or fines from the government or regulator. Cyber cover can extend to cover these costs and any fines imposed.
FREE Recruitment Consultants PI Insurance Review
Hopefully, you have found some of this information useful, but every recruiting business is different.
As such, you may want to take advantage of our FREE Business Insurance review service.
You can book a slot that suits YOUR diary via our website, or call one of our team on 0330 124 0730.