It’s often said that recruiters need to wear many hats. From HR advisor to sales professional, it’s a complex and fast-paced role that brings its fair share of stress. Recruiters operating in the flexible working sector can also find themselves on the front line of risk management, faced with ensuring all compliance checkboxes are ticked so that contractors can get to work quickly.
Sam Cox, Commercial Services Director at Qdos, talks us through what recruiters need to know about insurance compliance when placing contractors, and how Qdos Contractor Policy Check can help simplify and streamline this crucial aspect of the recruitment process.
Insurance as a contractual requirement
End clients requiring contractors to hold certain insurances is commonplace in the flexible working industry. This will most often be specified both in the contract between the contractor and end client, as well as the end client and the recruiter. As such, both recruiter and contractor are obligated to ensure that the requirements are met and maintained.
Sam explains, “Most contracts will stipulate a minimum of £1 million cover in respect of professional indemnity and public liability insurances to be held by contractors. Whilst claims against contractors are thankfully rare, the requirement for high levels of cover speaks to the potential financial consequences of a professional error or negligent act. If a contractor has no insurance or insufficient insurance, this can have significant repercussions for a recruiter as they may inadvertently be in breach of contract – and potentially in the firing line should the worst happen.”
“Checking contractors have the appropriate insurance in place should be a routine part of the onboarding process, alongside reference or right-to-work checks. Ideally, every recruiter will have a set process in place for each engagement which ensures that nothing is missed or overlooked.”
How real are the risks?
Most contractors are committed to following the rules and honouring their contractual obligations. However, as Sam explains, the few that don’t can put recruiters at serious risk.
“Worryingly, our own research has found that as many
as 20% of contractors don’t have insurance in place meeting their contractual requirements. Not only that, we also see cases in which contractors have fraudulently created their own policy documents, which can be really easy to miss if you don’t know what you’re looking for. It’s an oversight that won’t be flagged until an incident occurs, leaving recruiters exposed to significant financial liability.”
Qdos Contractor Policy Check Tool
What is it?
Contractor Policy Check is a tool developed by Qdos to safeguard both contractors and recruiters by verifying that contractors have adequate business insurance, providing an essential layer of protection. This helps ensure that contractors are fully covered and recruiters fulfil their due diligence responsibilities to clients.
Sam explains “Essentially, we collaborate with recruiters or hiring organisations to determine specific insurance requirements. We then directly collect policy details from the worker on their behalf.”
How does it work?
Contractor Policy Check is designed to remove the administrative headache of checking contractor policies from a recruiter’s back-office desk, with the benefit of expert assistance to help minimise uninsured contractors slipping through the net.
Sam explains, “Our process involves a thorough examination of the policy to assess coverage levels and identify any potential red flags indicating insufficient protection or fraudulent documentation. All of this is completed by insurance experts.”
“Upon completion, we provide a summary report outlining key insurance information, serving as strong evidence of due diligence. Importantly, we maintain ongoing records and diarise when policies are due for expiry so that records can be updated as needed.”
"We understand the importance of contractual compliance but also recognise the added administrative burden it can represent, which is why we also decided to make the tool free to use.”
Contractor Policy Check can be used as a standalone tool, or alongside Status Review – Qdos’ tool for streamlining IR35 compliance. Sam notes, “Combining both tools really helps minimise any inconvenience for clients, avoids the stress of multiple processes, and keeps everything together all in one place for ultimate peace of mind.”
