Recruitment Agency Contracts & Insurers Definition Of Covered Contract Terms

When arranging insurance for a Recruitment Agency, there should be a strong emphasis on the insurers definition of ‘standard and non-standard contract terms’ to ensure that cover is provided when placing temporary personnel.

The general consensus within the insurance industry is that the agency’s ‘standard terms of business’ should contain:

  •  A clause stating that the supervision, direction and control of placed personnel are the responsibility of the hiring client;
  •  A hold harmless agreement in the Recruitment Agency’s favour. This is an indemnity agreement, in contract language, that indemnifies (holds harmless) one of the parties in the contract for specific actions that might cause damage to the other party arising out of the transaction involved. In this instance, the agreement would be that the Recruitment Agency is not responsible for damages caused by the temporary placed personnel’s negligence.

Any terms of business where these two points are not present, are usually regarded as ‘non-standard contract terms’, and claims arising from the work carried out could be declined unless previously agreed to by the insurer.

Non-standard contract terms may also impose provisions. These include Indemnity to Principals Clause, to indemnify the hiring client under the Recruitment Agency’s insurance for work undertaken by the Recruitment Agency on their behalf, or a Waiver of Subrogation, which would prevent the Recruitment Agency’s insurer from the right to recover losses from a Third Party for reimbursement of a paid claim that the Third Party is responsible for.

We therefore, always strongly recommend that when signing up to hiring clients Terms of Business, these are reviewed by a legal team before completion. This is to ensure that the recruitment consultancy can comply with the feasibility of the contract and that the insurance policy can meet with the terms of the contract.

Macbeth has worked closely with recruitment firms for over 15 years. We have access to a wide range of specialist insurance policies and can arrange cover for firms signing up to both standard and non-standard terms.

For help and advice around insuring standard and non-standard contract terms contact Tony Gibbs on 0118 916 5485.

*Information correct as of 1st March 2018


Author: Tony Gibbs | March 1, 2018

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