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Business Insurance For Recruitment Consultants

 Compare business insurance quotes with Savvy to find the best policy for your recruitment business. 

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, updated on July 27th, 2023       

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Being a recruitment consultant who matches jobseekers to employment vacancies can be a very rewarding occupation, with hundreds of satisfied employers and workers thanking you for your services. However, if things happen to go wrong with the recruitment process or the person you found to fill a job vacancy causes loss or damage to your client or their property, things can quickly go downhill. For this reason, recruitment businesses need to have adequate insurance.   

You can compare quotes for many types of business insurance here with Savvy. Just answer a few simple questions about your business and the insurance you need and you’ll have multiple quotes from a range of respected insurers to consider instantly. Use our quick and easy comparison service to make sure you get the best insurance for your recruitment business today. 

What types of insurance should I buy for my recruitment business?

There are several types of business insurance you should consider if you run a recruitment consultancy. These include: 

Professional indemnity insurance 

Professional indemnity insurance covers you against claims that the advice, recommendations or services you provided to your client were either incorrect or negligent. It’s an important type of insurance to have for anyone who offers services in the recruitment industry, as you can potentially be held liable for the behaviour of those you place in jobs for a considerable time into the future. Cover is available starting from $250,000 and goes up to $10 million or more. 

What it covers: 

  1. Payment of compensation if there’s a successful claim against you 
  2. Payment of court-awarded damages to the litigant 
  3. Cover for your legal defence costs 
  4. Cover for the cost of disciplinary proceedings or investigations 

Public liability insurance 

Public liability insurance is also essential if you have an office which is open to members of the public. It can cover you if a member of the public is injured or sustains property damage as a result of your negligent business activities. This insurance can offer between $5 million and $20 million worth of cover. 

What it covers:  

  1. Third-party personal injury claims 
  2. Damage to a third party’s property 
  3. Legal fees to defend yourself 

General business insurance 

General business insurance may also be worthwhile if you have an office and portable equipment (such as laptops) which need coverage. Because glass breakage is a common exclusion from business policies, you may wish to purchase this as an optional extra if your landlord requires you to have insurance to cover the cost of glass breakage in your office.  

What it covers: 

  1. Fire, storms, theft, vandalism and collision which cause damage to your business assets 
  2. Specialist cover for electronic equipment and other portable equipment  
  3. Limited business interruption insurance 

Cyber liability insurance 

As a recruitment consultant, you may hold plenty of confidential information about potential job prospects and your clients’ businesses. Unfortunately, many cybercriminals may be able to get hold of these private details. For this reason, cyber liability insurance is also a very important form of insurance for all recruitment consultants, as well as other consultants or contractors working in related fields as well. 

What it covers 

  1. Data breaches including theft of client information 
  2. The cost of a forensic investigation into the cause of the breach 
  3. Data recovery costs 
  4. Cyber extortion and denial of service threats 
  5. Crisis management costs 
  6. Advertising and communicating with customers 
  7. Legal costs including any fines and penalties imposed 

What isn’t covered under my business insurance?  

The most common exclusions in the above types of business insurance include: 

  1. Injury to yourself or your employees 
  2. Flood damage 
  3. Unlawful activity or criminal negligence 
  4. Reckless behaviour or intentional damage 
  5. Anything to do with asbestos 
  6. The effects of pollution caused by your business activity 
  7. Damage to computer hardware 
  8. Upgrading of a system not related to the cybercrime 
  9. Power outages or failure of satellite or telecommunication services 
  10. Prior known circumstances or risks 

How much will my recruitment consultancy business’ insurance policy cost? 

There is no set cost for an insurance policy, as each applicant is different and faces unique risks. Many factors influence the cost of business insurance, including the following:   

  • The state you’re in  
  • Whether you live in a rural or urban area 
  • Whether you’re a sole trader, are in a partnership or run a larger business 
  • Your business size and turnover 
  • If you have any employees 
  • Your credit history  
  • Your insurance history 
  • Whether you’ve made an insurance claim in the past five years 

The main factor which will affect the cost of your insurance is the industry you’re in. All businesses in Australia are classified according to the risk their industry poses and are allocated a risk ratio. These ratios are used by insurers to calculate the comparative risk of any one business compared to another.  

However, the location of your business also influences the cost of your insurance. For example, a recruitment consultancy located in Tasmania may be quoted different insurance costs to one located in Queensland, due to the unique environmental risks posed to those in northern parts of the country. You can find out how much insurance will cost for your particular business by comparing quotes right here with Savvy. 

Why do I need business insurance for my recruitment consultancy?

Any situation where you are offering personal advice and services comes with risks.  Unfortunately, the risks faced by recruitment consultants can continue long after a candidate has been found and placed into an employment position. If that candidate proves to be unsuitable or commits a criminal offence in the future, you could be held liable if it’s proved your recruitment processes were negligent. This could happen if you didn’t adequately conduct background checks on the candidate, for example. For this reason, you need business insurance to cover you against a range of potential eventualities

Most small to medium-sized businesses have some contingency funds available, but they’re rarely sufficient to cover the cost of a major liability claim, which could possibly amount to millions of dollars. If such a claim is made against you or your business, and you have adequate insurance, you’ll have a much better chance of recovering quickly and getting back on your feet. 

Types of business insurance

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Frequently asked questions about business insurance for recruitment consultants

Will my professional indemnity insurance cover me for recruiting contractors and casual workers as well as permanent staff?

Yes – your professional indemnity insurance will cover those people you recruit irrespective of their employment status (such as part-time, full-time, casual or on-contract workers). It will also cover the service provided by casual and contract workers you employ in your own business.  

As a recruitment consultant, do I need run-off insurance?

Yes – you should have run-off insurance when you sell your business or retire. Run-off insurance is a type of professional indemnity insurance that protects recruitment consultants from claims made after they have sold their business, ended their career or retired. It offers insurance cover for several years (typically up to six) following retirement just in case a claim is made years after the original recruitment service was provided.  

Can I get professional liability insurance if I’m not a qualified recruitment consultant?

There is no nationally-recognised qualification required to become a recruitment consultant, so you should be able to get professional liability insurance if required. However, if you offer labour hire services in Queensland, Victoria, South Australia or the ACT, you do require a labour-hire licence. 

What information will I need to make a claim?

The information you should have to hand when you contact your insurance company to make a claim will include: 

  • The name of the policyholder 
  • Your policy number and start date (which can be found on your Certificate of Currency) 
  • A detailed description of the incident (what happened to cause the damage or loss) 
  • Specific dates and times when the incident happened 
  • Contact details of any other parties involved (or witnesses to the event) 
  • Details of your police report number (if a crime took place) 
  • Details of the property lost or damaged (including its age and value) 
  • Your bank details for settling the claim 

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Savvy does not compare all business insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

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