What is professional indemnity insurance?
Professional indemnity insurance helps cover the legal costs associated with claims against you of a perceived breach of duty or errors and omissions in your professional practice or advice. If a client believes this to be the case, they may make a claim for damages or compensation and not only could you be liable, your reputation could also be on the line.
Wow, that sounds serious, but why do recruitment agents need it?
Working in recruitment you’re in the business of helping employers to fill positions in their organisations and working with people to find the right position for their skill set. Essentially, you’re their professional sales person and you’re selling that job to that person and that person for that job. Just like advertisers can sometimes be accused of misrepresentation or making false claims, recruitment agents can be at risk of being accused of misrepresenting a career opportunity or misrepresenting a candidate. In which case, the organisation or candidate may seek compensation for any damages incurred by them in the process.
What kinds of risks might this involve for recruitment agents?
Whether you are placing temporary or permanent candidates, filling administration jobs or project management and director’s jobs or finding a new CEO, it’s important to have professional indemnity insurance for recruitment agents. Claims can be made if there is a perceived error in the advice you’ve provided to a client or candidate or in your practices as a recruitment agent in dealing with them.
This includes but is not limited to:
- Providing incorrect advice regarding industrial relations laws and dismissal.
- Advising a candidate against taking a job because you already have someone else lined up for it or for some personal/professional gain of your own – this of course would be unethical.
- Incorrect advice or information provided regarding grievance processes.
- Misrepresentation of a job.
- Misrepresentation of a candidate to an organisation.
- Incorrect advice regarding an organisation’s workplace policies and procedures, including their staff recruitment process.
- Putting forward a candidate who does not in fact require the skills, experience or qualifications to adequately perform a job, resulting in a loss of money for the client and a waste of time for the candidate.
Inappropriate practices as a recruitment agent could include but are not limited to:
- Failing to adequately check a job seeker’s references, employment history or qualifications.
- Breaching a client’s confidentiality – for instance, inappropriate distribution of a client’s CV or revealing personal information about a client to an organisation that may result in them not being a ‘preferred applicant’.
- Losing of integral documents relating to a candidate or client.
- Not acting in accordance with your client’s/candidate’s instructions or acting outside of the scope authorised by your client/candidate.
If you’re a recruitment agent, any of these claims could pop up at any time, and they might not be accurate, you are most probably performing your duty as a professional at all times. However, a claim like this can cause irreparable damage to your company’s reputation and to your payroll if you don’t have the correct insurance for recruitment agents. To organise professional indemnity insurance for recruitment agents contact Contractor Cover on 1300 438 268.