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What Recruiters Need to Know About Umbrella Company Insurance

Your contractors will not usually be covered by your client’s employee insurance, so it’s normal practice for the contract to state that they must be insured separately. As a recruiter, this means your contractors need to be insured before they can work for your clients. Where your contractors are employed by an umbrella company it will fall to the umbrella to arrange this insurance, so what does that mean in practice for recruiters and their contractors and clients?

Why does the umbrella company provide insurance?

This comes down to the contractual relationship. Usually, your contract with the end client will stipulate minimum levels of insurance required, and these requirements will be mirrored in your contract with the umbrella company. The umbrella company provides the insurance cover as part of their obligation as the contractor’s employer.

It’s worth noting that if the contractor is engaged through agency PAYE rather than being employed by an umbrella company it would fall to you as the recruiter to arrange the insurance. Contractors who trade through their own Limited companies would be responsible for arranging it themselves.

What kind of insurance cover is required?

As a minimum, a compliant UK umbrella company will have:

  • Professional indemnity – to cover claims from the client due to damage or loss from negligent services or advice provided by their employees

  • Public liability – Cover for legal or compensation claims from other parties in connection with their business

  • Employer’s liability – cover for legal or compensation claims from their employees for illness or injury while at work. This is required for all UK employers.

Referred activity

Most umbrella companies will have standard insurance policies in place that will cover the majority of contracts. Depending on the sector you’re working in, you may occasionally recruit for roles where enhanced insurance is required, either because there is an unusual risk, or because there is a higher risk than standard insurance would cover. For example, additional or extended cover may be required if you recruit for:

  • Medical, dental and veterinary practice

  • Financial services, investments or banking

  • Ship’s crew

  • Legal practice

  • HGV or delivery drivers

If your contractors are employed by Orange Genie Umbrella

The exact amount and details of cover will vary from one umbrella company to another. As standard Orange Genie employees and CIS self-employed subcontractors are covered by:

  • Employers Liability £10 million cover

  • Professional indemnity £5 million cover

  • Public liability £10 million cover

Driver’s negligence insurance can be added on request as an extension to our liability insurance.

In addition, Cyber insurance has been in place for a number of years which reduces the risk that your contractors will be disadvantaged in the event of an attack on our systems.

If you have questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com

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