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What insurance does a recruiter need?
Whether you are an independent recruiter or a larger recruitment agency, matching prospective candidates to the right employers carries a lot of responsibility. Working as a recruitment consultant can be extremely rewarding, but this type of work isn’t without its own risks and challenges. From incomplete reference checks, accidental loss of your clients' data to a candidate or client injuring themselves in your workplace, mistakes happen and they can be costly.
Ensuring you have the right business insurance in place can help protect you or your agency from these risks and offer you peace of mind. But what is the best insurance for recruiters? First, let’s look at the common types of insurance you might want to consider.
- What are the common types of insurance for Recruiters?
- Do I really need all of these types of insurance?
- What insurance does a Recruitment Consultant need?
- What insurance does a Recruitment Agency need?
- What are the average costs of insurance for Recruiters?
What are the common types of insurance for recruiters?
There are a few common types of insurance you might want to think about if you’re a recruiter. It may sound daunting to anyone unfamiliar with the world of business insurance, so we’ve broken them down for you:
Employers’ Liability Insurance—A legal requirement in the UK, you must get Employers’ Liability (EL) insurance as soon as you become an employer. Although there are exceptions (e.g., if you hire a family member), in most cases you will need this cover and you could be fined £2,500 for every day you go uninsured. EL insurance will help you to pay any legal fees or compensation if an employee claims they have suffered illness or injury as a result of the work they do for you.
- Example: A part-time employee claims they have become ill as a result of the long and stressful working hours that have been required of them, and do not believe that you have provided adequate support.
Professional Indemnity Insurance for a recruitment agency—If a client is unhappy with your work, alleges you were negligent or made a mistake, and it led to a real or perceived financial loss, Professional Indemnity (PI) insurance offers you protection from the financial strain of legal fees and compensation that may be payable. Whilst not a legal requirement, some clients may contractually require you to have this.
- Example: A client has claimed you gave incorrect and misleading information about their business to a prospective candidate. They believe this information is defamatory and has a negative impact on their reputation.
Public Liability Insurance—Designed to cover the legal costs and compensation if a third-party claims they have suffered personal injury or damage to their property as a result of your work. Again, although this is not a legal requirement in the UK, Public Liability insurance is worthy of consideration especially when your role involves regular interactions with the public.
- Example: Whilst visiting your office, a client slips on a wet floor and injures their leg. They claim there was no wet floor sign present to warn them.
Legal Expenses Insurance—Can offer cover for challenging situations, such as employment or contract disputes, debt recovery or disputes involving faulty goods and services. Your legal costs can be covered up to a certain limit and you also gain access to expert legal advice if needed. It is important to note that this type of legal expenses insurance will not provide cover against situations covered by other types of policy (such as those mentioned previously!).
- Example: A client is disputing the terms set out in your contact with them, and would like to make a claim against you.
Cyber and Data Risks Insurance—Living in an increasingly data-driven world comes with its own challenges, and Cyber insurance will offer protection against data breaches, hacking and other cybercrimes. Crucial for any business or service that handles sensitive information such as names, addresses or financial information, it will cover direct costs associated with both first and third-party claims.
- Example: A hacker has gained access to your client's sensitive information and data putting both them and your business at risk. A first-party claim will offer cover for the costs of recovering the data lost.
Personal Accident Insurance—Also known as Personal Injury Insurance, this provides financial cover if you or an employee suffers serious injury or death as a result of an accident. Personal Accident insurance can help protect you against loss of income whilst you are unable to work and can help with other expenses. However, it does not provide cover for other reasons you may be unable to work, such as sickness or mental health.
- Example: You have suffered a serious injury as a result of a fall in the workplace and are unable to work for four weeks. Your business suffers a loss of income as you are unable to perform your duties such as sourcing new clients.
Do I really need all of these types of insurance?
Whether you work alone, are looking to start your own agency or manage an established firm will affect the types of insurance you will want to consider.
Naturally, a larger business is likely to have more employees, more equipment and may have it’s own premises, meaning the risk of an incident occurring is far higher than someone working from the comfort of their home. We’ve outlined the key differences you might want to think about, depending on your circumstances.
What insurance does a Recruitment Consultant need?
If you work independently or are looking to start your own recruitment agency, it’s likely that the most important type of business insurance to start with will be professional indemnity insurance . And possibly business equipment and legal expenses. However, you may be working alone for the time being and may not have your own business premises yet, which means you might not need much else.
If you have no employees you are not required by law to have employers liability insurance. If you are operating remotely, say from your own home, it’s unlikely you will need public liability insurance as you will not be working in a public space with frequent visitors, all of whom have the potential of having an accident!
What insurance does a Recruitment Agency need?
If you are already an established recruitment agency with a number of employees and perhaps even own your own premises, there will be some additional risks that you may want to consider beyond professional indemnity insurance, such as employers’ liability and public liability.
By law, a business is required to hold employers’ liability insurance if they have hired staff, so be sure not to get caught out here. If you have your own dedicated work premises then you will also want to think about public liability insurance, especially if you receive frequent visits from your clients or candidates.
If you do have work premises it’s likely this is also home to the tech and equipment you need to operate smoothly, such as computers, laptops and phones. In this case, it is definitely worth checking out business contents insurance, which will cover the damage or loss of such items in the event of a fire, flood or theft up to a certain amount. What are the average costs of insurance for recruiters?
What are the average costs of insurance for Recruiters?
|Insurance Costs for a Sole Trade with 1 Employee (per month)|
|PL £1m + PI £1m||£10|
|PL £2m + PI £1m||£10|
|PL £1m + PI £1m + personal accident||£13|
|PL £1m + PI £1m + optional extras||£31|
|PL £1m + PI £1m + 1 employee||£106|
|PL £1m + PI £1m + 1 employee + personal accident||£113|
|Insurance Costs for a start-up agency with 5 employees (per month)|
|PL £1m + PI £1m||£104|
|PL £2m + PI £1m||£105|
|PL £1m + PI £1m + personal accident||£120|
|PL £1m + PI £1m + personal accident + business and office equipment (£10,000)||£122|
|PL £1m + PI £1m + optional extras||£176|