How can you be sure your business is protected?

This is a guest blog contribution by REC business partner Marsh Commercial. 

In tough times, don't leave your insurance to chance, review your business protection for FREE.

If 2020 has taught us anything, it's even with the best will in the world you can never fully prepare for the unexpected. There are talks of a post-Christmas lockdown; just weeks away from the end of the transition period we await precise details of how we are going to trade with the EU in future years; and the implications of IR35 amendments present significant tax liability risks. The road ahead remains somewhat uncertain.

This uncertainty presents increased risks to recruiters, so having the right insurance in place to offer protection is crucial:

• Professional indemnity to cover costs of settling or defending a claim.
• Liability cover to help protect your business, colleagues, and contractors.
• Cyber and data insurance to protect against hacker damage and cyber extortion.
• Crisis containment protection in the event of a public relations crisis, should you need to manage adverse publicity.

However, arranging cover is just the start of the process. Recruiters should review insurance policies regularly to ensure the right level of cover is maintained to protect against the risks they face. Now is the time to undertake a thorough insurance health check: identifying policies that may have incorrect levels of cover – too high results in unnecessary expenditure, too low leaves recruiters vulnerable to claims.

Take the example of insuring essential IT equipment. Rather than relying on asset registers to give valuations for sum assured figures, accurate replacement values should be acquired. This provides peace of mind that if a full suite of damaged IT hardware needs to be replaced, it would be covered sufficiently to avoid costly expenditure and minimise business interruption.

The Devil is in the detail

As well as reviewing policies in place and levels of cover provided, attention should be given to checking contracts that exist between a recruiter and the client – particularly non-standard agreements containing details that can be easily overlooked. Contracts are often arranged on the recruiter's terms of business, but when this is not the case agreeing hirer's terms of business can leave recruiters open to potentially risky levels of liability.

An employee making a mistake may lead to high costs for the hirer, and depending on the terms of business agreed when arranging placement, the recruiter could be liable to indemnify these costs. Failing to involve legal teams in checking these contractual details upfront will potentially result in the recruiter having to pay significant damage and legal expenses further down the line.

Protecting against claims

Claims can arise at any time so recruiters must ensure they have the right cover in place, at the right time so they have peace of mind knowing they are covered.

Employers and public liability policies covers costs and damages arising from negligent acts causing death, injury or property damage. Recruiters must have cover in place at the time of an incident, which leads to a claim for it to be valid. 

This is different to professional indemnity policies, which covers defence costs and any damage awards because of an error or omission – by either the recruiter's staff or the workers supplied on assignment to the client under contract. In this case, the policy must be in place at the time the claim is made. Suppose a supplied worker makes an error that costs the client money, unless the recruiter has extended their policy to include vicarious liability – which means they accept responsibility of workers' erroneous or negligent acts and omissions – they cover may not be adequate in protecting them in the event of a claim.

Therefore, we urge you review your cover regularly to ensure you have the appropriate cover in place. Waiting until an incident occurs and a claim is made to find out whether you have the right protection is simply too late. This could leave you out of pocket financially if you have to pay costs and compensation yourself. 

An insurance proposition dedicated to your needs

The hardening PI market is making it increasingly challenging for recruiters to get the cover they need, at an affordable price. Our dedicated scheme, REC Recruiters Choice, is created for your industry with you in mind – giving comfort and added protection from insurance built around you.

As an REC member, you can arrange a free insurance health check and 15% discount off your recruitment insurance – don't leave it to chance without checking you have the essential protection you need.

This is a limited-time promotion, which must end on 31 December 2020 – so act now to lock-in your special discount. Book your FREE insurance health check today to secure 15% discount off your recruitment insurance here.

This is a marketing communication.

REC is an Introducer Appointed Representative of Jelf Insurance Brokers Ltd trading as Marsh Commercial, which is authorised and regulated by the Financial Conduct Authority (FCA). Not all products and services offered are regulated by the FCA (for details see www.marshcommercial.co.uk/info/regulation/). Registered in England and Wales number 0837227. Registered Office: 1 Tower Place West, London EC3R 5BU.