Pen Underwriting expands international cover for recruitment agencies

Pen Underwriting, a subsidiary of Arthur J. Gallagher & Co., has announced the expansion of its specialist insurance proposition for recruitment agencies to support clients’ international growth and diversification.

Pen’s international and multi-section insurance policies customised for recruiters can now cover the professional indemnity risk of placing candidates into positions in the US and Canada – the only overseas territories not previously covered.

This extension, Pen noted, addresses the growing demand for UK talent filling executive and sector-specific roles in North America.

Additionally, enhanced vicarious liability cover is also now available for recruiter clients. This move, according to Pen, was in response to a trend of increasing contractual complexities and legal liability for recruitment agencies.

Vicarious liability arises in relation to non-permanent placements, such as contractors and project managers, with contracts now effectively increasing the likelihood of the recruiter being held responsible for the actions or omissions of the individual once in role.

Nick Kernaghan-Andrews, Head of Recruitment Agency Insurance at Pen Underwriting, said: “Recruiters are highly entrepreneurial by nature, skilled at flexing to meet the changing demands of the domestic and international labour markets and match candidates with opportunities.

“But they need to ensure their risk management strategy and insurance protection covers the full range of liabilities they are potentially facing as contractual responsibilities and territorial demands shift.

He added: “As a long-term underwriter of recruitment industry risks – with Pen holding more than 25 years’ experience, data and insight – our role is to enable clients to meet the challenges and opportunities of their fast-evolving industry head-on. To do that we continually review our proposition, enhancing cover where appropriate in ways that support clients’ growth and diversification agendas.”

Kernaghan-Andrews explained that many recruitment companies based in the UK are turning to places like the US and Canada to find growth opportunities and to boost turnover amidst flat levels of demand in the domestic economy.

This is happening a lot for high-level executive jobs and in the IT/Tech sector, for roles like sales, designers, and developers, the executive noted. Similarly, the contracts for recruiters are getting tougher, with more responsibility and legal risk involved.

Because of this, Pen decided to introduce “enhanced vicarious liability cover for recruiters, where required, for the actions or omissions of individuals they place in non-permanent roles or for those agencies who retain contractual liability for direction, supervision and control,” Kernaghan-Andrews concluded.

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