Launching your own recruitment agency is exciting, but let’s not pretend it’s without its pitfalls. You’re building something from scratch. That means risk, responsibility, and a whole lot of moving parts. One of the most overlooked (but absolutely critical) parts of your setup? Recruitment Agency Insurance, or otherwise known, business insurance.
It’s not the sexiest topic, we get it. But if something goes wrong, a client claim, a data breach, or even a slip in the office, you’ll be grateful you had your cover sorted early.
Here’s a straight-talking breakdown of what insurance you actually need when starting your recruitment agency, and why it matters.
Professional Indemnity Insurance
Covers you when advice goes wrong.
As a recruiter, your job is to advise, recommend, and ultimately place the right person in the right role. But what happens if a client claims your advice cost them money, say, a bad hire that tanks a project?
Professional indemnity (PI) insurance covers the legal fees and any potential compensation you’d need to pay. It’s there to protect your agency’s reputation (and bank account) when accusations of negligence or error come knocking.
Why it matters for recruiters:
Your recommendations carry weight. When they go sideways, PI insurance makes sure the fallout isn’t financially devastating.
Employers’ Liability Insurance
If you employ staff, this one’s a legal must-have.
Even if your team is small or just part-time, you’re legally required to have employers’ liability cover. This protects you if someone working for you gets injured or sick as a result of their job, such as repetitive strain injuries from screen time, trips over cables, or any workplace mishaps.
Why it matters for recruiters:
Agencies are fast-paced. Your staff are juggling calls, emails, CVs, and interviews. If someone gets hurt while working for you, this cover keeps you protected.
Directors & Officers Insurance
Protects your personal liability as a founder or decision-maker.
D&O cover isn’t just for big corporates. It shields founders and directors if they’re personally sued for decisions made while running the business. That could be a breach of duty, a mishandled dismissal, or something financial.
Why it matters for recruiters:
If you’re the one signing contracts, managing staff, or overseeing strategy, this insurance protects you, not just the business.
Public Liability Insurance
Covers accidents involving third parties (like clients or candidates).
If someone visits your office, say, a client or a candidate, and slips on a wet floor or gets injured, public liability insurance covers you for any resulting legal claims and compensation.
Why it matters for recruiters:
Even if you’re running a lean operation from a coworking space, accidents happen. This one’s about peace of mind.
Cyber Insurance
Hackers don’t care how new you are.
If you store candidate data, client information, or handle payments online, cyber insurance is an absolute no-brainer. It covers you for hacks, phishing attacks, invoice fraud, and ransomware, including the costs of recovery, notifying clients, and any fines.
Bonus protection:
Good cyber cover also protects against things like fake invoice scams (where you pay the wrong bank account because someone spoofed an email) and business interruption if your systems go down.
Why it matters for recruiters:
Data is your currency. Protect it like it’s cash.
Buildings & Contents Insurance
Cover for your stuff — and the space you work in.
If you’ve got a physical office, you’ll want to protect it. Building insurance covers structural damage (like from fire or flooding), while contents insurance looks after your desks, tech, and everything in between.
Why it matters for recruiters:
You don’t want to lose momentum because a burst pipe ruins your setup. Get covered, stay operational
Check for Sector-Specific Insurance Add-ons
Some insurers offer bolt-ons tailored to recruitment businesses, like cover for temporary placements, breach of confidentiality, or vicarious liability (when a temp you place causes damage and the client points the finger at you). Make sure to ask about these during your consultation.
What Should You Do Next?
We’re not insurance brokers, we’re recruitment people. But we’ve seen what can go wrong when cover is ignored or underbought. Starting your agency without the right insurance is like placing a candidate without reference checks: risky and avoidable.
Our advice? Get a specialist involved. Companies like Marsh Commercial offer free consultations for startups and will walk you through your exact needs (not a generic one-size-fits-all quote). They’ll also help trim out any unnecessary costs or cover you don’t need.
Your Insurance Checklist
As mentioned, speak to a specialist, but here’s what I’d recommend as a minimum for any new recruitment agency:
- Professional Indemnity
- Employers’ Liability
- Directors & Officers
- Public Liability
- Cyber Insurance
- Buildings & Contents (if applicable)
Get your Recruitment Agency Insurance sorted early, not when you’re putting out fires later.