Recruitment Insurance
Recruitment insurance is designed to cover the risks of running a recruitment agency or consultancy and not just financial risks. The big difference between recruitment insurance and standard life insurance is that normally the policy would only cover you. At the same time, you’re employed in such an occupation, but the recruitment industry works differently. As such, there are two different types of policies available: employment-based protection and business continuity protection.
This article will give an overview of these policies more precisely so that you can decide which one will suit your requirements best. Self-employed recruitment businesses generally use this type of policy, but it is not restricted to this occupation alone. It protects against your income being lost due to sickness or injury/illness abroad, redundancy at work, non-payment of employment legislation fees for mandatory training, building work on the premises etc.
If you would like to read more information or learn more about the pricing of business insurance, you can do so here.
Why is Recruitment Insurance Important?
In the UK, the cost of recruitment insurance has been increasing dramatically over recent years. In 1999, a business could cover itself for around £1,500 per month, but this figure has risen to around £4,000 per month. This amounts to a 500% increase in charges and may be because insurance companies have been fined for breaching competition laws – they have also had to pay compensation to those injured by their products or services. Recruitment insurance is a necessity for businesses within this industry as they face all manner of risks.
Key amongst these are the legal ramifications of not paying employment legislation fees for mandatory training or cases where a company has not registered for VAT in the UK. There are also risks involved in recruiting staff from abroad, which could lead to expensive medical bills.
Recruitment insurance usually is available over 12 months, with premiums ranging from £5,000 to £50,000 per annum. It will only cover self-employed individuals within the recruitment industry and will not cover those who work for an agency or consultancy as employees. Although it may seem expensive due to its high price compared to other types of insurance policies, businesses in this industry should seriously consider purchasing it to protect themselves from any financial losses they could suffer in the future.
There are different types of policies available for this type of protection. One is the employee-based policy, which covers everyone who works in the industry. The other is the self-employed policy, which protects only the owner of the business.
Employment-based protection:
These policies protect insurance holders from the risk of loss if they lose their jobs because of health problems. When an insurance holder falls ill and cannot work, they may be compensated for lost salaries. This way, if you were to take such a policy and fall ill shortly after commencing work (or shortly after the start of your business), you could receive compensation until you are eligible for long term disability benefits. That said, employment-based protection doesn’t only cover illness; it can also cover death or injury incurred while at work (this would be a lot like an accident and sickness insurance).
Business continuity protection:
This policy protects insurance holders from the risk of loss if they lose their jobs because of circumstances within their control. For example, if you were to get into a fight with a colleague or get involved in a dispute with a customer, you could be sued for damages. This will usually cost you time and money, and if your company’s activities were to be disrupted for a long time, your business could even fail.
In both cases, the insurance provider can set the premiums based on your industry, the number of workers you have, and your service. Though it is possible to get these policies cheaper by having some of your employees take out one on their own (a multiple employer policy), this isn’t recommended. The premium will reflect the risk of operating a recruitment agency or consultancy, so if too many insureds on one policy, it will cost more than fewer insureds on their policy.
Warrants of precedence are a kind of document that is given to an employer when they start on a new job. It shows the order of precedence from the date the warrant is granted. For example, if an employee has been working on a recruitment agency for more than six months and then leaves voluntarily or voluntarily retires, they will be able to get their pay for up to twelve months after leaving. Their agreement will specify how long they can be paid late. If after late compensation has been agreed, the employee goes on short term sick leave or retires afterwards, they will still get paid until there’s a gap in time between their leaving and compensation claim. In this way, the employee’s income will continue smoothly without being interrupted by a claim or a gap in time.
An improper reference-checking of a potential candidate, A visitor injuring themselves at your business or fire occurring in your premises could damage your financial standing in the long run. If you’ve decided that you need insurance and want to get the best deal possible, speak with your insurance broker and get a quote.
Learn more about business recruitment here.
Other useful links about business insurance:
Business Contents Insurance
Business Building Insurance
Employers’ Liability Insurance
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