INSURANCE FOR LABOUR HIRE AND RECRUITMENT COMPANIES

A QUICK OVERVIEW

Labour Hire and Recruitment Insurance protects you from the advice and services you provide to your clients. Also, from exposures to on-hired / temporary workers and contractors supplied to a Host Employer:

WHO NEEDS COVER

We find most new requests for insurance come from clients needing cover for:

• Placement of candidates in permanent positions

• Temporary placement of Employees and Contractors for the provision of On-Hired Services or On-Hired Medical Services

• Employment consulting services in the areas of
  • occupational health and safety,
  • human resources,
  • human resources relations,
  • human resources management,
  • employment, outsourcing, psychological testing,
  • reference checking,
  • workplace assessments, and;
  • careers counselling and/or change management

HOW COVER PROTECTS YOU

Examples of the types of risks that Professional Indemnity and Public Liability cover are:

• Written or verbal threats of legal action by a client from an actual or alleged negligence or failure in the services provided, or third-party injury/property damage

• Demands for financial compensation from your clients or third parties

• Actual legal demands or Court proceedings against your business from services provided

WHAT IS THE COST OF THE INSURANCE

It is too hard to offer an accurate indicative cost as many factors might impact premiums, for example:

We find for small non-specialist Labour Hire providers offering White Collar on-hired workers annual premiums may start by ranging from $2,200 – $5,000 as a guide.

While for our Labour Hire businesses with Blue Collar on-hired workers should expect higher annual costs to start from $6,000 – $11,000.

INFORMATION NEEDED TO QUOTE

The documents we may need to quote for Professional Indemnity and Public Liability are:

Our labour hire and recruitment proposal form is available for download on this page as a PDF or we have an online form available too.

WE WILL MAKE SURE YOU HAVE THE RIGHT COVER

Over 50% of our customers are in the Labour Hire and Recruitment sector. It is sector we have supported for over a decade and remained committed to. This means we have a lot of firsthand experience placing appropriate insurance covers for our clients.

There are limited insurers providing cover to Labour Hire businesses, especially if you are in high-risk sectors (e.g. Blue Collar, Medical / Nursing, Mining, etc.) and it is important that a broker correctly outlines your risk exposure to the insurance company to avoid being declined a quote.

We have seen many cases, even with large insurance broking firms that should know better, where their Labour Hire clients have not had their policies correctly placed with an insurer. Some examples are:

• Other brokers not having the relevant on-hired / temporary worker extensions correctly negotiated with the existing insurer

• Company names that require cover being missed and not listed on the insurance policy

• Incorrect Retroactive Dates meaning that past claims and liabilities cannot be claimed correctly against the policy

CLAIMS OVERVIEW

EXAMPLES OF LABOUR HIRE CLAIMS’ WE HAVE MANAGED FOR OUR CLIENTS

We have managed multiple claims over the years, but a few examples are:

• Forklift drivers causing damage to a Host Employers property resulting in $20,000 worth of repairs to roller doors

• Truck drivers being involved in an at-fault accident causing damage to a Host Employers vehicle and on-site assets resulting in recovery attempts from the Host Employer in excess of $1,000,000

• Locum medical doctors being held responsible for negligence in their advice resulting in legal demands in excess of $100,000

HOW WE SUPPORT CUSTOMERS DURING CLAIMS

We encourage and educate our clients that potential legal issues between you and a client (or third party) that may result in a claim still need to be notified to us and reported to your insurer.

A business that fails to report known claims or circumstances can result in an insurer limiting – or declining – cover. This mainly impacts Professional Indemnity / Management Liability / Cyber Liability policies due to the claims made and notified structure (please call or email Alex Conlon for more details).

In our experience, customers often worry reporting issues on a precautionary basis will impact their renewal premiums. However, in over 10 years of supporting labour hire and recruitment clients we have not had an insurer penalise renewal premiums in the absence of an actual claim. Once our clients have a better understanding on this, they gain more confidence in speaking with us when things go wrong.

Formal claims will require a lawyer or loss adjustor to be appointed by your insurer. Their initial role is to investigate and provide interim advice to your business (often on a reservation of rights basis). They report back to your insurer on the facts and provide guidance to them on policy coverage. The ultimate goal is to confirm indemnity is granted by the insurer and have a lawyer appointed to represent your business in defending the allegations, or, reaching a settlement, if appropriate.

INSURERS WE WORK WITH

The insurer we recommend can depend on several factors specific to your business and type of cover required.

PUBLIC LIABILITY & PROFESSIONAL INDEMNITY

Our Director, Alex Conlon, has found that working with About Underwriting Pty Ltd via their Lloyd’s of London binder, to be a great benefit to many of our new and existing labour hire clients, for blue collar and medical related risks. Some excellent results have been achieved by working directly with their Underwriting Manager, Jodie Banks, providing almost a decade of support to our clients.

Some specific challenges we have worked on to support the labour hire sector:

• Responding quickly to newly introduced insurance obligations enforced by the Queensland Government (Queensland Health) under their Contingent Workforce preferred supplier panel for the provision of Temporary and Contracted Workers.

• Finding solutions for Abuse / Molestation Liability Insurance for Labour Hire providers in the education sector in line with Department of Education Victoria’s coverage obligations as a result of vicarious liability to child abuse claims from workers.

Other Labour Hire insurer options are available and below are a few reasons they aren’t our first choice:

MANAGEMENT LIABILITY

• About Underwriting Pty Ltd – have a solid policy wording that blends well with their recruitment package. For smaller businesses their minimum premiums may be cost prohibitive.

• Berkley Insurance Australia Limited – are a primary insurer we have worked with for a long time. They have a good wording, competitive premiums and good service standards. We have had issues post-claims at renewal with what we have felt were unfair premium loadings and imposed excesses, even for long term clients.

• Chubb Insurance Australia Limited – offer a quality wording with some unique benefits (like a broad Crime extension, Kidnap & Ransom, etc.). Unfortunately, their standard excesses are much higher than other insurers in the market as are premiums.

• AIG Insurance Limited – again, offer a good wording back by unique extensions. For Labour Hire risks the exposure to Occupational Health & Safety Defence Costs cover means the policy becomes cost prohibitive.

• Hutch Underwriting Pty Ltd – are a newer entrant to the market who we are investigating as a possible, well priced solution, for clients. There is also a benefit of some unique market extensions and generally lower excesses.

CYBER LIABILITY

• 360 Cyber – this is a primary insurer we like to use. We find that their wording is clear and concise in their inclusions/exclusions. The premiums are fair and the insurer has worked to expand several extensions (like Directors & Officers Liability extension, NIL excesses in some cases; often at no additional charge).

• Chubb Insurance Australia Limited – we find that the Chubb wording is one of the more complex to interpret notwithstanding the advertised benefits. Premiums are quite reasonable as are excesses. An advantage to Chubb is the ability to offer higher policy limits up to $5M without additional underwriting information.

• Coalition – we consider has a unique market offering through their client-oriented portal providing insights and recommendations to guide customers on potential security issues and vulnerabilities from their online presence.

• About Underwriting Pty Ltd – have access to their own binder and open market insurer options, for more complex risks.

BUSINESS INSURANCE

• Vero Insurance – through our connection to the AUB Group we have the benefit of a unique Austbrokers extension that means several strong benefits are included to customers without needing to charge additional premiums. Vero have consistently provided very high service standards and quick approvals on straight forward claims (i.e. think damaged laptops dropped down a flight of stairs, or a non-violent theft that resulted in stolen property from the office during business hours… yes, we find that happens more often than you think, especially for employees bicycles!)

• 360 Commercial – similar to Vero they provide several default extensions. Previous claims experiences with 360 have offered quick response times. Higher standard excesses of up to $1,000 compared to some other insurers still prepared to offer $250 or $500.

OUR POINTS OF DIFFERENCE AS A SPECIALIST LABOUR HIRE INSURANCE BROKER

• A primary point of contact year-on-year via our Director, Alex Conlon and support from Monica Cook as our Business Development Manager

• Fast response times (most queries are actioned within 1-3 hours)

• An early renewal review process early (aiming for 8 weeks prior to expiry); quotes are provided within thirty (30) days from the expiry date, where possible (not days out from your expiry date!)

• New quotes aim to have indicative premiums provided within 1-2 business days

• Non-legal contract reviews for non-standard Terms of Business from Host Employers to highlight major issues that might impact insurance coverage (completed within 1-5 business days)

• Policy comparisons can be provided between our quote and other brokers/insurers highlighting differences in cover

TESTIMONIALS & KIND WORDS

• Adrian Karloci – B&K Consulting

• Kim Loader – Able Recruitment

Other kind comments from outgoing employees from current clients include:

TO OBTAIN PROFESSIONAL INDEMNITY AND PUBLIC LIABILITY QUOTE PLEASE COMPLETE AND RETURN THE BELOW FORM TO: ALEXC@ABTERRACE.COM.AU