As a recruitment consultant, insuring yourself may not be the first thing that comes to mind; hiring the best people for the job probably does! Yet those consultants who neglect to insure themselves suitably are taking a big gamble. Recruitment professionals face risks every day, from improper reference checks, injury to a candidate in your office or theft of confidential client data- all of which are possible scenarios. Action needs to be taken to cover yourself if the worst comes to the worst.
So what’s available?
Everyone wants to provide their clients with the best advice possible. Unfortunately for those who give advice for a living, things can go wrong. Professional indemnity insurance covers your legal costs and expenses when defending a claim, and any compensation that may be awarded thereafter. Claims can be lodged against you for a number of reasons, from making a mistake in some work or giving poor advice, unintentional breach of confidentiality or even defamation and libel. Different levels of this insurance type are available, with Markel Direct offering professional indemnity insurance ranging from £50,000 to £5 million.
Why do Recruitment Professionals need it?
I’m sure you have some stories of your own about some interesting incidents that have happened, but professional indemnity insurance is a cost some businesses want to forget about, because it’s expensive and largely misunderstood. They feel they can sweep any problems under the carpet, however they’re leaving themselves wide open to a big lawsuit. The easiest way to think about it is from your client’s point of view.
We all know that staff are one of the biggest cost to any business, and therefore when a company comes to you for advice and help on who it should hire, they want to get it right. So what happens if the person you hire doesn’t work out? The client could sue you because of the poor advice you have given them, whether you agree with it or not. Without insurance you would have to stump up not only the legal costs, but also any compensation, which wouldn’t be cheap.
Even if a professional has stopped practicing they can still be liable. They are responsible until the end of the contract, therefore it is important that insurance is taken out for the length of the contract. It’s easy to see why it is vital that you cover yourself so you’re not left paying for your mistakes, literally!