Employers Liability Insurance for Recruitment Agencies

Insurance really works

Recruitment agencies often face a myriad of risks that they may be unaware of, and liability for employees is one of them. In the UK today, we are living in an increasingly litigious society and more claims are being made against businesses now than ever before. Agency workers have a right to be covered if they suffer from injury or disease in a particular job role.

It does not matter if workers you supply are on a temporary or permanent contract; if you are providing these workers then you are considered the employer of these workers. It is therefore a legal requirement that as a recruitment agency, you have employers liability insurance cover to ensure that there are available finances to fund any claims.

Whether you are the sole trader of a recruitment agency working from home or have an office with a team of recruitment consultants, you will need employers liability insurance that covers both your fellow consultants and the people who you supply to work for clients.

Employers liability insurance should not just cover injury or disease either. Vital protection should be provided in an employers liability insurance policy for a number of employment practice violations that employees of an agency may make claims for. These violations include wrongful termination of employment, sexual harassment, racial discrimination, gender discrimination and age discrimination to name a few.

New regulations for agency workers

From 1^st October 2011, there are new regulations in place that are aimed at giving agency workers more rights as employees. These regulations place an emphasis on giving agency workers the same entitlements as other employees that are working for the same business as the agency worker.

These regulations have raised some concerns from recruitment agencies as to where liabilities lie and who will be responsible for providing employers liability insurance to protect agency workers. As long as the agency employee is still working for the recruitment agency then it will still be the responsibility of the recruitment agency to ensure that it has employers liability insurance to cover its workers.

What if my recruitment agency does not have employers liability insurance?

If it is found that a recruitment agency does not have the relevant employers liability insurance to protect its agency employees then the same actions and fines apply as they do to any other employer. This means that a recruitment agency can be fined up to £2500 per day that they do not have employers liability insurance and can be fined up to £1000 if they do not make their employers liability insurance policy available to employees. Recruitment agencies can also be fined up to £1000 for not making their employers liability insurance policy available to the Health and Safety Executive upon request.

Choosing an employers liability insurance policy

Different employers liability insurance policies offer varying levels of cover with the legal minimum being cover for costs of £5m. Depending on the nature of the roles that you are placing your agency workers in, it may be necessary to have cover for costs greater than this. Many employers liability insurance providers will offer standard cover for £10m.

It can also be possible to tailor employers liability insurance into a recruitment agency insurance package that will also offer insurance cover such as public liability insurance. These insurance packages can help to save costs on purchasing separate policies.

Share your experiences

Please note: The views expressed in community areas of this site do not necessarily reflect or represent the views of Law on the Web, its owners, its staff or contributors.