Recruitment and Staffing Agency Insurance

Recruitment and Staffing Insurance Programs

Recruitment, staffing, and employment assistance agencies require a comprehensive liability policy to protect against allegations and claims of wrongdoing and other exposures.

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Zensurance - Recruiter

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Staffing Professional

Business insurance for recruiters and staffing agencies

Recruitment and staffing agencies fulfill a valuable role by finding talented, experienced professionals to place with their client firms.

However, sourcing high-quality candidates to fill demanding career positions with a variety of organizations comes with significant risks. For example, if your agency recommends an individual to a client who fails to live up to expectations because they lack the necessary skills and experience, your agency may be at risk of misrepresenting that individual to your client. Or if a candidate you placed at an organization is suddenly let go and files a wrongful dismissal lawsuit against your client, they could also name your recruitment and staffing agency in that suit.

A recruitment and staffing business insurance policy can help protect your agency from these and other types of risks.

Recruitment and staffing business insurance is a policy that is tailored to suit your agency’s specific needs. A comprehensive policy of this kind features several coverages that are designed to protect your business’s assets. Moreover, recruitment and employment agencies are one of the many types of businesses that may be required to carry professional liability insurance to operate legally in the province they provide their services.

A comprehensive recruitment and staffing agency insurance policy typically includes the following coverages:

  • Professional Liability Insurance: Also known as errors and omissions (E&O) insurance, professional liability insurance provides your agency with protection against misconduct, misrepresentation, negligence, and failing to deliver a service as promised. Any employment agency could be accused of negligence or an accidental breach of confidentiality that results in an expensive lawsuit. Professional liability insurance covers your legal costs and damages.
  • Commercial General Liability (CGL) Insurance: CGL insurance is frequently referred to as ‘slip-and-fall’ insurance because it is designed to cover your exposure in your agency’s day-to-day operations. Essentially, it protects you against claims related to third-party bodily injury and property damage that may occur due to negligence or an accident. CGL covers your legal expenses and the outcome of any related lawsuit.
  • Commercial Property Insurance: Commercial property insurance protects your office from loss or damage caused by severe weather, fire, flood, vandalism, or theft. Also known as commercial building insurance, it covers the cost to replace or repair damages to your building, as well as the equipment, electronics, furnishings, and inventory housed at your premises.
  • Cyber Liability Insurance: Protecting your agency, clients, and job seekers’ confidential data from the risks posed by cybercrime and accidental data breaches is paramount for any organization. Cyber liability insurance is designed to help you do that. It provides coverage for legal costs and damages if your agency is a victim of a cyber-attack or if one of your employees inadvertently exposes confidential data. It also covers the cost to repair and restore your computing systems and any losses you suffer resulting from a cyber-related event.

Insurance for a recruitment or staffing agency may start at approximately $1,000 per year, but larger agencies should expect to pay more. In general, insurance companies determine the cost of a recruitment and staffing agency insurance policy on a variety of factors, including:

  • The location of your agency and the services you provide
  • How many employees you have
  • Your organization’s certifications, training, and experience
  • Your agency’s annual and projected revenue
  • Your insurance claims history

With more than 50 insurance providers in our partner network, Zensurance can offer you a variety of options to meet your needs at the best price.

All businesses that offer recruitment or staffing services should protect their assets and reputations with a comprehensive insurance policy. Zensurance has helped thousands of staffing firms and industry professionals get the coverage they need, including:

  • Contingency employment agencies
  • Executive search firms
  • Human resources management professionals and firms
  • Recruiters and recruitment agencies
  • Staffing agencies
  • Temporary help agencies
  • Traditional employment agencies

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Common claims scenarios

job interview

Problem: A candidate your firm helped place at a client’s business is terminated a few weeks after starting the position. The terminated employee files a wrongful dismissal suit against your client and your agency.

Outcome: Your professional liability insurance may cover your legal expenses to defend yourself and any court-ordered settlement you are told to pay.

ankle injury

Problem: While visiting your office to be interviewed by one of your recruiters for a position with one of your clients, the candidate trips over an extension cord, and injures their ankle. After seeking medical attention for the injury, the individual sues your agency for third-party bodily injury.

Outcome: Your commercial general liability insurance may pay for the injured person’s medical expenses regardless of the lawsuit, and for your legal expenses and the outcome of the suit if it goes to trial.

management interview

Problem: After interviewing a candidate several times for a senior management position at a financial institution your agency represents, the financial institution alleges the individual is not qualified to hold the position and pursues legal action against you for negligence and failing to deliver a service as promised.

Outcome: Your errors and omissions insurance may pay for your legal fees and the outcome of the action against your agency.

Frequently asked questions

Does a temporary staffing agency’s insurance policy cover the employees they hire to work at a client’s jobsite?

It depends. Because a temporary staffing agency hires and pays the candidate and not the agency’s business client, they are considered an employee of the agency. However, it’s your policy’s details that will clarify this situation. Ask your licensed broker if your policy extends to cover your employees.

Does professional liability insurance include protection against allegations of defamation and libel?

Yes. Professional liability insurance, or errors and omissions insurance, includes coverage for your media and advertising as well as any accusations of defamation, libel, or slander. Your commercial general liability insurance may also cover you in such situations, depending on the policy’s terms. Speak to your licensed broker to be sure.

I am a recruiter who works for a staffing agency. My employer has insurance. Do I need my own policy?

It is advisable to consider purchasing your own professional liability insurance policy to ensure you are not exposed by any gaps in your employer’s policy. Speak to one of our licensed brokers about your concerns and what your options are.

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You’re busy helping your clients find the top-tier talent they need, and individuals get the career positions they want. You don’t need to burden yourself with searching for an insurance policy at the same time.

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