Insurance for Recruitment & HR.

Most recruitment and HR businesses carry professional indemnity insurance as the foundation, since it responds to claims about the advice or placement itself, alongside management liability for claims tied to running the business and cyber liability given the volume of candidate data typically held. The right mix depends on whether the business directly employs placed workers, as labour hire firms do.

Yes, this is still worth considering. Professional indemnity responds to claims from clients about a placement or piece of advice regardless of whether the business has employees, and many corporate and government clients require proof of cover before engaging a recruitment or HR consultant at all.

No, this is a common misconception. A client's professional indemnity or management liability policy is designed to protect their own business, not the recruitment or HR consultancy that made the placement or gave the advice. A separate policy of your own is generally needed regardless of what the client holds.

Professional indemnity responds to a claim that a placement, reference check or piece of advice given to a client was negligent. Management liability responds to claims about how the business itself is run and staffed, such as a dispute with its own employees or a regulatory investigation. Recruitment and HR businesses commonly carry both, since they face client-facing and internal employer exposures at the same time.

This is worth discussing directly. A labour hire or staffing firm directly employs the workers it supplies to a client site, a different relationship to a recruitment agency placing someone into a client's own permanent role. This can affect how a policy should be structured.

Yes, this is exactly the kind of exposure cyber liability is designed to respond to. Recruitment and HR businesses hold significant volumes of personal information as a core part of the work, including resumes, background checks and salary details, which makes a breach both more likely to be significant and costly to respond to.

Yes. A well known 2018 breach at recruitment platform PageUp, reported under the Notifiable Data Breaches scheme, showed how directly a breach in this sector can affect both the business holding candidate data and the corporate clients whose data it was holding on their behalf. Businesses with turnover under $3 million sit outside some Notifiable Data Breaches scheme obligations, though this varies by circumstance and is worth confirming directly.

Professional indemnity is typically arranged on a claims-made basis, meaning the policy in place when a claim is made and notified is the one that responds, not necessarily the policy that was current when the original placement or advice took place. This makes continuous cover particularly important for this type of insurance.

This depends on what your client contracts require, the seniority and salary level of the roles typically placed and the scale of a potential claim if a placement went wrong. A sole consultant placing junior or mid level roles may find cover in the $1 million to $2 million range sufficient, while an executive search firm working with larger corporate clients may require limits of $5 million or more.

Insurers typically ask for the services provided, whether the business directly employs placed workers, annual fee income or turnover, the limit of indemnity required and claims history. A broker can help present this information accurately to the market.

A previous decline does not rule out cover elsewhere. Recruitment, labour hire and HR consulting is a specialist area for insurers, and a broker with the right panel can often place risks that a single insurer has turned down.