Recruitment insurance frequently asked questions

On this page you will find frequently asked questions for recruitment agencies.

Please click on each of the questions below for further information.

What is Professional Indemnity Insurance?

This insurance provides cover for claims made against you as a Company which may arise as a result of professional negligence of you or your staff, in the conduct of your professional duties as a Recruitment Agency, Including all legal costs incurred with the consent of the insurers in defending any such actions against you, whether they prove successful or not.

The policy is written on a claims made basis where it only responds to claims made to insurers during the policy period irrespective of when the alleged act of negligence occurred.

How much does Professional Indemnity Cost?

This will vary depending on your size and the limit of your cover.

Underwriters calculate premium based on the turnover or income during the previous 12 months and offer limits of £100,000, £250,000, £500,000 £1,000,000, £2,000,000, £5,000,000 and £10,000,000. They will also take into account of previous claims experience.

What is Employers Liability Insurance?

This insurance is compulsory under the terms of the Employers Liability (Compulsory Insurance) act 1969. The policy provides indemnity to employers in respect of liability at common law or under statute to their employees, for injury or disease arising out of their employment.

What is Public Liability Insurance?

This insurance provides cover in respect of legal liability of a person or a business for accidental bodily injury or accidental damage to the property of members of the public, caused by the person or business or of the employees of the business in the course of their work.

The majority of the claims will arise out of negligence.

Negligence may be defined as the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or as doing something which a prudent and reasonable man would do.

How much does Employers and Public Liability Cost?

This varies amongst insurers but underwriters will calculate premium based on the following factors:

• Limits Employers Liability £10,000,000 and £25,000,000.
  
  
• Public Liability £1,000,000, £2,000,000, £5,000,000, £10,000,000.
  
  
• Permanent or Temporary Supply. If Temporary Supply - Types of Placements & Type of Contract with Clients.
  
  
• Wages and Turnover of Temps ranging between Non Manual to Heavy Manual the latter attracting higher premiums.
  
  
• Standard and Non Standard Contracts with clients the latter attracting higher premiums.

They will also take account of previous claims experience.

What do insurers consider standard terms of business for recruitment agencies?

Standard Terms of Business means terms of business which contain an agreement that any temporary placement supplied by the agency shall be under the supervision direction and control of the end user client so far as concerns responsibility for legal liability incurred;

To such placement(s)

To any other party as a result of the acts or omissions of such placement(s)

What is Drivers Negligence Insurance?

Drivers Negligence provides cover in respect of claims for accidental damage caused to a client hirers vehicle being driven by an agency supplied driver. It is normally limited £10,000 any one claim. It cannot be purchased in isolation and is usually bought as an extension to the insured's Public Liability policy.

How much does Drivers Negligence Cost?

This varies amongst insurers but is usually rated on the number of drivers supplied at any one time and minimum packages usually start at £2,000.00.

In addition limits and claims will influence the premium. Most insurers will only offer limits of £10,000 and £5,000 any one claim.

What is Office Package Insurance?

This will cover physical loss or damage to the insured property ie. Buildings, Contents and Computer Equipment. The cover may sometimes be extended to include additional types of cover, such as Business Interruption and Terrorism.

What other types of insurance cover should I consider?

Depending on your size and area of specialism:

• Directors’ and Officers Liability
• Cyber Liability
• Medical Malpractice
• Commercial Legal Expenses
• Motor Fleet
• Personal Accident Insurance

Claims Examples

Professional Indemnity
Candidates CV inadvertently sent to his existing employer.
References not checked properly and agency wrongfully supplied inexperienced candidate.

Employers Liability
Agency assumed responsibility for training a rail worker and successfully held responsible for subsequent injury to the worker when found to result in a gap in training.

Public Liability
Agency supplied a plumber to a major project under a “non standard” contract who incorrectly joined a water pipe leading to substantial flooding. Agency found liable.
Agency supplied aircraft engineer under a non standard contract who damaged a plane wing. Agency found liable.

Drivers Negligence
Agency driver damages client vehicle by hitting low bridge whilst driving.
Agency driver reverses client vehicle into bollards causing damage to the vehicle.