Recruitment and Employment Agency Insurance for agencies placing temps and permanent staff
Cover for the placements you make, the temporary workers on your books and the candidate data you hold. Specialist brokers compare recruitment policies for agencies with consultants, branches and a payroll of workers on client sites.
- Professional indemnity for placements and vetting
- Liability for temporary workers at client sites
- Fidelity cover for theft by temps and staff
Reviewed October 2026 by the MyBusinessComparison.com editorial team
What is recruitment agency insurance?
Recruitment agency insurance protects businesses that find, place and supply workers to other organisations. It usually brings together professional indemnity for placement errors, employers' and public liability for temporary workers, fidelity cover for dishonest workers, cyber cover for candidate data and protection for the agency's own offices.
The risks differ from most office businesses because so much happens on other people's premises. A temp injures a colleague in a client's warehouse, a nurse supplied to a care home makes a medication error, or a client loses money because a placed finance manager was not who their CV claimed. Each lands with the agency in a different way.
How cover is set up depends on how workers are engaged: on your payroll, through umbrella companies or as contractors trading through their own companies. Insurers ask about each group separately.
Recruitment agency insurance at a glance
- Suits
- Temporary, contract, permanent and executive search agencies
- Core policies
- Professional indemnity, employers' and public liability, fidelity and cyber
- Compulsory part
- Employers' liability, for agency staff and usually for temps on your payroll
- Insurers ask about
- Sectors supplied, how workers are engaged, vetting checks and fee income
- Often added
- Trade credit, management liability and legal expenses
- Higher risk areas
- Healthcare, construction labour, drivers and security staffing
Which policies does a recruitment agency need?
Most agencies combine the policies below. Perm only agencies need fewer sections; agencies running a large temp payroll need most of them.
Professional indemnity
Claims that you placed an unsuitable candidate, failed to check references, qualifications or right to work, or breached confidentiality, causing a client a loss.
Read more about professional indemnity insurance
Employers' liability
Injury or illness suffered by your own staff and, in most cases, by temporary workers on your payroll while working at client sites.
Read more about employers' liability insurance
Public liability
Injury to client staff or the public, and damage to client property, caused by temporary workers you supply.
Read more about public liability insurance
Fidelity and crime
Theft from clients by temps you supplied, and fraud against the agency itself, from false timesheets to payment diversion.
Read more about crime and fidelity insurance
Cyber and data
Hacked candidate databases, ransomware on your recruitment platform and the cost of handling a data breach involving CVs and identity documents.
Read more about cyber insurance
Trade credit
Unpaid invoices when a client fails, which matters because temps are paid weekly long before clients settle.
Read more about trade credit insurance
Management liability
Defence costs and awards when consultants, candidates or shareholders bring claims against the agency or its board, including discrimination complaints.
Read more about management liability insurance
Office and contents
Branches, interview rooms, IT equipment and income lost if an office cannot open.
Read more about office insurance
Cover some agencies add
- Medical malpractice: for agencies supplying nurses, doctors, carers and allied health staff
- Legal expenses insurance: disputes over fees, unpaid invoices and tribunal claims
- Personal accident and travel: for consultants travelling to clients and staff placed abroad
- Directors' and officers' cover: higher limits for agencies with investors or a planned sale
Which recruitment businesses do we help?
Insurers rate agencies on the sectors they supply and how close their workers are to risk. These are the agency types brokers place most often.
Agency owners also ask aboutkey person cover for top billing consultants and insurance for offices and professional firms.
- Industrial and warehouse staffing agencies: large temp payrolls on production lines, in distribution centres and on night shifts
- Driver recruitment agencies: HGV, van and forklift drivers supplied to hauliers and logistics firms, often in the client's vehicles
- Construction labour suppliers: operatives and tradespeople on building sites, where employers' liability is the main concern
- Nursing, care and locum agencies: clinical staff placed in hospitals, care homes and clinics, needing malpractice cover
- Education supply agencies: teachers and support staff in schools, with safeguarding and abuse cover checked closely
- Office and commercial temp agencies: administrative and finance temps handling client systems and money
- IT and technical contractor agencies: contractors with access to client networks, where cyber and professional risks overlap
- Permanent and executive search firms: fee based placements, where professional indemnity and confidentiality are the main risks
- Hospitality and events staffing: chefs, bar staff and event crews on short notice bookings
- Security staffing agencies: officers supplied to guarding contractors and venues, a specialist area for insurers
- Interim management providers: senior interims making decisions inside client businesses
- Recruitment process outsourcing firms: running hiring for clients under long contracts with service levels
How much does recruitment agency insurance cost?
Insurers look less at your office and more at who you place and where. These factors move the premium most.
Sectors you supply
Construction, healthcare, driving and industrial work are rated higher than office or IT placements.
Temp payroll and fee income
The wages paid to temps drive employers' liability, while fee income drives professional indemnity.
How workers are engaged
Workers on your payroll, umbrella workers and limited company contractors are each treated differently.
Vetting and compliance checks
Right to work, reference, qualification and background checks, and how you record them, are reviewed closely.
Contract terms with clients
Uncapped indemnities and high limits demanded by large clients can raise the cost or need negotiation.
Claims and disputes history
Past claims, client complaints and employment tribunals all feed into the price.
Where recruitment agency cover often falls short
These are the gaps agencies most often discover when a claim lands.
- Sectors not declared to the insurer, such as starting to supply care or construction workers mid year
- Placements outside the UK, or contracts governed by overseas courts, unless agreed
- Contractual penalties and service credits charged by clients for missed targets
- Agency drivers using client vehicles, which the client's own motor policy normally has to cover
- Clinical errors by healthcare workers you supply, unless malpractice cover is included
- Unpaid invoices from a failed client, which need trade credit insurance
- Complaints or incidents already on file at inception that were not disclosed to the insurer
Recruitment package or professional indemnity alone?
Some agencies buy professional indemnity and little else. This is what a full recruitment package adds.
| Feature | Recruitment package | Professional indemnity only |
|---|---|---|
| Placement and vetting errors | Covered | Covered |
| Temps injured at client sites | Employers' liability for workers on your payroll | Not covered |
| Temps damaging client property | Public liability for workers you supply | Not covered |
| Theft by temps from clients | Fidelity cover can be included | Not covered |
| Candidate data breaches | Cyber section available | Limited, if any, breach costs |
| Usually suits | Agencies supplying temporary or contract workers | Perm only and executive search firms |
How to arrange recruitment agency insurance
Insurers want to understand your placements in detail. This order of work keeps the process quick.
Split income by sector and type
Show temp, contract and permanent income separately, by the sectors you supply.
Explain how workers are engaged
Payroll temps, umbrella workers and limited company contractors, with typical numbers on assignment.
Document your checks
Right to work, references, qualifications, DBS checks where relevant, and how records are kept.
Pull out client contract terms
Liability limits, indemnities and insurance clauses from your largest client agreements.
Compare the detail
Check worker definitions, sector restrictions, territorial limits and any exclusions for clinical or driving work.
Speak to a recruitment insurance specialist
Outline your sectors, placements and temp payroll, and a broker who insures recruitment businesses will compare terms.
Compare quotesRecruitment agency insurance FAQs
How much does recruitment agency insurance cost?
It depends on the sectors you supply, your temp payroll and fee income, how workers are engaged, your vetting checks and claims history. An executive search firm and an industrial staffing agency of similar turnover pay very different premiums because their exposures differ.
Do recruitment agencies need employers' liability for temps?
Usually, yes. Most recruitment policies cover temps on your payroll under the agency's employers' liability, with their wages declared. Because the client directs the work, its own policy may also be involved, and workers engaged through umbrella or limited companies are treated case by case, so the worker definition is worth checking.
What does professional indemnity cover for a recruitment agency?
It covers claims that your service caused a client a financial loss, such as placing a candidate with false qualifications, missing a right to work check or sharing confidential information. It pays compensation and legal costs, up to the limit chosen.
Is theft by a temp from a client covered?
Not by liability cover. Dishonesty by workers you supply needs a fidelity or crime policy that extends to third party losses. Insurers will ask about your vetting and how workers are supervised on site.
Do agencies supplying nurses and carers need extra cover?
Usually. Clinical errors by workers you supply can be brought against the agency, so medical malpractice cover is usually needed alongside professional indemnity. Insurers check registration, training and how placements are matched to skills.
Does insurance cover agency drivers using client vehicles?
The client's motor policy normally covers the vehicle and third parties, and should allow for agency drivers. The agency's own policies cover placement errors and workplace injury. Some agencies also buy contingent motor cover in case the client's policy fails to respond.
Can recruitment agencies insure against unpaid invoices?
Yes, through trade credit insurance. It pays out when a client becomes insolvent or fails to pay within agreed terms, which protects the cash you have already paid out in temp wages.
Are candidate discrimination claims covered?
Some management liability or employment practices policies extend to job applicants, covering defence costs and awards for alleged discrimination during recruitment. It is worth confirming this with the broker, because not every policy includes candidates.
How do I get a recruitment agency insurance quote?
Submit your details through this page and a broker who insures staffing businesses will pick up the conversation. Expect early questions on income split by sector, temp payroll, how workers are engaged, your vetting process and any claims.
Compare cover built for recruitment agencies
Placements, temps, candidate data and cash flow covered together by a broker who knows how agencies operate.