Pen Underwriting has expanded its insurance offering for recruitment agencies, introducing new coverage to support clients’ international growth and address rising legal liabilities associated with contractual complexities.
Effective immediately, Pen said that its international and multi-section insurance policies for recruiters now include an option to cover professional indemnity risks for placements in the US and Canada, territories previously excluded. The change follows growing demand for UK talent in executive and sector-specific roles in these regions.
The company has also introduced enhanced vicarious liability cover in response to increasing contractual complexities affecting recruitment agencies. This form of liability applies to non-permanent placements, such as contractors and project managers, where contracts are increasingly placing responsibility on recruitment firms for the actions or omissions of individuals once in a role.
Recruitment agencies are exposed to various risks, including claims of professional negligence, misrepresentation, and vicarious liability for the actions of placed candidates. Without adequate insurance, agencies may face significant financial losses and reputational damage.
For instance, if a candidate provided by an agency causes harm or financial loss to a client, the agency could be held liable. Therefore, having tailored insurance coverage is essential to mitigate these risks and maintain trust with clients and candidates.
Several insurance products are specifically designed to address the needs of recruitment agencies, including professional indemnity (PI) insurance, employers' liability insurance, public liability insurance, vicarious liability cover, and drivers’ negligence insurance.
Nick Kernaghan-Andrews, head of recruitment agency insurance at Pen Underwriting, said recruiters must ensure their risk management strategies align with evolving liabilities as contractual obligations and territorial demands shift.
He added that many UK-based recruitment firms are looking to expand into overseas markets, particularly in the US and Canada, as domestic demand remains flat. He noted that the executive recruitment and IT/tech sectors, including roles in sales, design, and development, have seen particular growth in international placements.
Pen noted that its multi-section policies for recruitment agencies – ranging from micro and SME firms to large corporate agencies – offer coverage across multiple risk areas.
Besides this revamped proposition, Pen also recently expanded its international ports and terminals (P&T) specialism to include US risks, ensuring it can now provide coverage in all jurisdictions worldwide.
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