What insurance do I need to start an agency?

Helping you understand recruitment agency insurance requirements and which insurance policies you should consider when opening a recruitment agency

It goes without saying that getting set up as a recruitment agency might seem complicated, especially with the recent and ongoing changes we are seeing within the industry. With the impact that the COVID-19 pandemic has had upon recruitment, if you intend to open up a recruitment agency, ensuring you are protected from risk where possible is the best course of action.

Through evaluating the level of risk your agency might be open to, you can then better understand your insurance needs. However, there are some insurance policies that are generally applicable to all recruitment agencies, here we highlight those policies and why they might just prove vital for your business.
 

Professional Indemnity:

What does it cover?

Not everything goes to plan all the time. Sometimes mistakes are made. It’s important that you ensure you are ready to deal with any of these mistakes as effectively as possible. Part of this preparation should include maintaining an adequate Professional Indemnity coverage, just in case.

Professional Indemnity Insurance covers claims or allegations of professional negligence, errors or omissions made against you by clients and third parties in relation to the services you provide.

Examples of circumstances which may lead to a claim under professional indemnity insurance include:

• Breach of professional duty
• Infringement of intellectual property
• Loss of documents or data

Public Liability:

In the day to day running of any business, it’s possible for you or your employees to come into contact with clients, and other members of the public.  Whilst recruitment agents are unlikely to be visiting hazardous locations, or carrying out dangerous activities, accidents can and do happen in the most innocuous of circumstances.

Because of this, having Public Liability Insurance offers the necessary protection for your new recruitment agency. If a claim is brought against your agency relating to the personal injury of a third party or for physical damage to third party property, having Public Liability Insurance in place will provide you with cover and help protect you from potential loss.
 

Employers’ Liability Insurance:

If you employ a member of staff, it’s likely that Employers’ Liability Insurance will be a legal requirement for your recruitment agency.

Much like mistakes of a professional nature, physical accidents within the workplace are not uncommon. Employers’ Liability Insurance provides cover for claims brought against you in relation to personal injury sustained by employees as a direct result of their work at your business, for which you are legally liable.

Accidents within the workplace are often unpredictable so, by having Employers’ Liability Insurance in place, you are limiting the potential financial impact that such an accident may have upon your agency.

It would be wise to first find out whether Employers’ Liability Insurance is indeed a legal requirement for your agency.
 

Other insurances to consider:

• Cyber Insurance: Protects your agency from a range of cyber risks such as data protection or the potential loss from the damage caused by hackers.
• Drivers’ Negligence: Protects your agency relating to liability for damage caused by staff-driven and business-owned vehicles.
• Personal Accident: Provides financial aid on behalf of your agency to staff members suffering from injuries sustained within the workplace.
• Directors and Officers: Protects Directors or Officers facing allegations of wrongful acts in relation to management of their agency.

 

Not only does Qdos provide a range of insurance policies for recruitment agencies, which you can find here, Qdos has also supported over 2,800 recruitment agencies and hiring businesses, helping them to navigate the new off-payroll working rules. The Qdos Status Review facility provides a range of expert IR35 solutions, including IR35 status reviews and IR35 insurance, to allow companies to compliantly place and engage contract workers.