Operating a recruitment or employment-agency business in London brings numerous opportunities — but also significant liabilities. From placing candidates in roles where errors lead to client loss, to data breaches of sensitive personal information, to on-site accidents involving temporary staff — the exposures are real. For recruitment agencies, having the right insurance portfolio is vital to protect your business, your clients, and your reputation.
At Fraser Bond, we advise recruitment firms, staffing consultancies and employment-service businesses on insurance that aligns with their operations, risk exposure and regulatory requirements — especially in the London market.
There is no single “one-size-fits-all” policy called recruitment agency insurance — instead, recruitment agencies typically need a combination of cover types tailored to their business model. Key covers include:
Professional Indemnity (PI) Insurance / Errors & Omissions – Protects the agency against claims arising from advice, placement errors, mis-representation of candidates, reference checking failures or breach of contract.
Public Liability Insurance – Covers injury to third parties or damage to property arising from your business activities (for example clients visiting your office).
Employers’ Liability Insurance – Legally required in the UK if you employ staff (including temporary employees in certain circumstances) to cover employee injury or illness at work.
Cyber/Data Liability Insurance – Given agencies handle large volumes of personal data (candidates, clients), cover for data breach, hacking, ransomware and regulatory penalties is increasingly important.
Office / Contents Insurance – To cover your physical assets (office equipment, furniture, computers) from theft, damage or loss.
Recruitment firms operating in London face specific risk factors that make appropriate insurance especially critical:
High value placements and contracts — A single high-level placement error can lead to significant financial loss for your client and a claim against your agency.
Data risk — Handling sensitive candidate and client data (personal records, references, contracts) increases exposure to cyber-attack or regulatory breaches.
Multiple stakeholders — You engage with clients, candidates, third-party employers, sometimes subcontractors or temporary staff — each adds to your access to liability.
Contractual obligations and accreditation — Clients often require recruitment agencies to hold specific insurance limits as part of supplier contracts.
London market complexity — Operating in the capital may add higher exposure (e.g., large-scale corporate clients, international placements, regulatory scrutiny).
Without the right insurance you run the risk of a claim severely impacting your business continuity, reputation or financial stability.
Here are some benchmarks and drivers when selecting recruitment agency insurance:
Premiums for recruitment agency insurance can start from modest amounts — for example one provider starts at ~£5.64/month for basic cover for small recruiters.
Insurance packages for recruitment agencies may offer professional indemnity limits from £50,000 upwards, and public liability indemnity limits up to £10 million in some packages.
Key cost drivers include: size of agency (turnover), number of placements, complexity of roles (specialist/high risk), number of employees, volume of data handled, claims history and whether you supply temporary staff or act as principal.
Important policy features to verify:
Does your PI cover include placed candidates’ errors or omissions?
Are data breach/cyber risks included or excluded?
Does your public liability cover client-site visits or candidate placements on customer premises?
Are your employment practices/subcontractors properly addressed?
Do you have appropriate office/contents cover if you have physical premises?
Fraser Bond recommends you follow this structured approach:
Define your business model and exposures – Are you a niche recruiter (e.g., IT, finance), a general employment agency, supply temporary staff, operate internationally or just UK-based?
Check client/supplier requirements – Many corporate clients will stipulate minimum insurance cover and may look at your insurance certificate as part of vetting.
Select appropriate cover types and limits – Choose PI limits that reflect your contract values and risk; choose public & employers liability accordingly; add cyber/data cover if you handle sensitive data.
Review policy wording and exclusions in detail – Ensure services you provide are covered (candidate placement, reference checks, employer liability), check retroactive date, territory, exclusions, what is not insured.
Compare quotes and insurers – Use brokers or specialist providers familiar with recruitment agency risk. Many providers offer tailored recruitment agency packages.
Ensure compliance with UK regulation – For example, if you supply temporary staff, employment-agency regulation may apply; ensure your cover aligns.
Review annually – As your agency grows, takes on new service lines (e.g., international placements), or increases turnover, your risk and therefore insurance needs will evolve.
Maintain proof of cover – Keep your certificate of insurance readily accessible for clients, candidates, audits or contracts.
Fraser Bond brings deeper advisory value for recruitment agencies especially those operating in or servicing London’s market by:
Understanding how recruitment agency risk links with business services, data compliance and contractual obligations in the London corporate environment.
Helping you review and interpret your policy documents to ensure they align with your agency’s specific exposures.
Assisting you to position your agency as a credible, insured partner when dealing with clients who may require verification of cover.
Supporting you in integrating insurance review with your growth strategy — protecting your business as you scale.
If you run a recruitment or staffing agency in London and want to ensure your business is properly covered, visit FraserBond.com or contact our London advisory team for tailored guidance on insurance for recruitment agencies, professional indemnity cover, cyber/data protection and risk-alignment.
