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Recruitment consultants professional indemnity insurance, PI cover

Recruitment Consultants Professional Indemnity Insurance

Hensure  offers Recruitment Consultants Professional Indemnity insurance online, or in person. As a Recruitment Consultant you source candidates for your clients, screen, select and place them in appropriate roles, ensuring that they are successfully implemented in their new environment. In order to be successful you need to have a thorough understanding of your clients requirements.

We have access to Professional Indemnity insurers who target all sectors of the UK recruitment industry regardless as to whether you are placing permanent or temporary staff into businesses or a combination of both.

Professional Indemnity insurers will look at each risk on its merits and charge the appropriate premium. If you are only involved in the placement of administrative staff, where salaries are low and the expectations of clients are similar then this is seen as fairly low risk. If, however, you are involved in head hunting for executive/ director level then there will be a greater level of responsibility on you to ensure confidentiality, suitability and the qualifying of a candidates background i.e. qualifications, experience, previous employment history, references etc.

It is also becoming a lot more common for recruitment consultants to enter into contracts whereby they are vicariously liable for the actions of the personnel supplied. This presents an extra risk to Insurers but we have access to schemes that can offer Professional Indemnity cover including or excluding Vicariously Liability Cover.

The risk

What do insurers look for when assessing the risk in providing Recruitment Consultants Professional Indemnity Insurance?

  • Size of firm – The overall size of the firm, based on total turnover is taken into consideration.
  • Type of business – Insurers will want to know the split of annual income derived from the proportion of temporary & permanent staff.  Clerical & office based staff are considered low risk.  Trades such as medical, nursing, community care staff, heavy industrial, railway, aviation, petrochemical, offshore workers, financial & banking, fall into the high risk category.
  • Qualifications – Insurers will most likely want to see the CV belonging to the core people within the firm demonstrating they have a minimum of five years’ experience.
  • Contract size – With reference to large contracts, insurers will be interested in the extent of the recruitment consultant responsibilities and whether they are adequately resourced.
  • Claims – If there is a history of PI claims then this usually reflects the quality of the consultant, their staff and their internal risk management.
  • Overseas exposure – Insurers are interested in knowing if the recruitment agent deals with clients overseas due to the potential litigious nature of dealing with clients in those particular countries
  • Retroactive exposure – Does the practice have an exposure to claims in the current firm or a former practice arising from past work?

Policy coverage:

  • Breach of civil liability
  • Negligent act error or omission
  • Negligence of sub-contractors
  • Irrecoverable fees
  • Rectification and loss mitigation costs
  • Bodily injury or property damage arising from breach of professional duty
  • Defence costs
  • Unintentional intellectual property rights infringement (other than patents)
  • Unintentional breach of confidentiality
  • Unintentional defamation
  • Loss of third party documents or data
  • Computer virus transmission
  • Court attendance costs

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Example of the type of claim faced by a Recruitment Consultant.

Irrecoverable fees: Often claims can be avoided (and therefore business relationships saved) by consideration being given to waiving outstanding fees owed. Where it can be shown that the pursuit of such fees would result in a greater counter-claim, then the cover allows us to work with the Insured closely and potentially reimburse the outstanding fees.

Unsuitable candidate: The insured placed an employee, it transpired he was not equipped to do the job and was, in fact, negligent in the performance of his duties. This resulted in dismissal and a loss of income to the employer. The insured failed to confirm the accuracy of the candidate’s qualifications and references and was therefore liable for losses caused to the claimant by the candidate and the expenses incurred by the claimant in the employment process.

Contact us now for more information about Recruitment Consultants Professional Indemnity insurance.

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