Business Insurance is designed to protect a business owner's financial assets and is an essential investment for a recruiting business.
This article will cover the main insurance coverage for recruiting businesses, general liability insurance, and suggest other policies that are suitable for this business.
Recommended: Use our dedicated small business insurance provider, Next Insurance, to get a quote now!
General Liability Insurance For Recruiters
All businesses, regardless of industry, face risks that should be covered by insurance. The most common and comprehensive type of policy business owners invest in is general liability insurance.
Some of the risks general liability insurance covers are:
- Bodily injury
- Property damage
- Medical payments
- Legal defense and judgment
- Personal and advertising injury
While businesses aren't legally required to carry general liability insurance, operating without it is extremely risky. If your business is sued, you could end up facing fees totaling hundreds of thousands of dollars (or more). Having a sufficient general liability insurance policy in place to help compensate for these damages is the only way to prevent this type of event from devastating your business.
Learn more about the risks covered by general liability insurance.
Check out our review of the Best Small Insurance Companies.
COMMON SITUATIONS THAT GENERAL LIABILITY INSURANCE MAY COVER FOR A RECRUITER
Example 1: During an open house event for high school students hosted by your company, a guest slips on a wet floor and seriously injures themselves. General liability insurance would pay for the guest’s medical costs and your legal fees in the event of a lawsuit.
Example 2: During an office tour, a potential investor reaches for an award on your trophy shelf and accidentally knocks the entire unit onto their head. They accuse you of improperly securing the shelf and threaten to sue. General liability insurance would cover the investor’s medical costs, your legal fees, and any settlement payouts.
Example 3: A local rival claims you’ve stolen their logo design for your updated business logo and threatens to sue. General liability insurance would cover your legal fees and any payout awarded in a settlement.
Of course, this is not an exhaustive list of perils a general liability insurance policy will cover, and some conditions may result in a particular peril not being covered. It's always best to talk to your agent in-depth about the specifics of your policy to avoid blind spots in coverage.
Learn more about the risks covered by general liability insurance.
Cost Of General Liability Insurance
On average, recruiters in America spend between $400 - $700 per year for $1 million in general liability coverage.
Check out the chart below for a snapshot of average general liability insurance expenditure across a variety of industries:
Several factors will determine the price of your policy. These include your:
- Number of employees
- Per-occurrence limit
- General aggregate limit
You may be able to acquire general liability insurance at a discounted rate by purchasing it as part of a business owner's policy (BOP) rather than as a standalone policy. A BOP is a more comprehensive solution that includes multiple forms of coverage, such as business interruption and property insurance.
Other Types Of Coverage Recruiters Need
While general liability is the most important type of insurance to have, there are several other forms of coverage you should be aware of. Below are some other types of insurance all recruiters should obtain:
Professional Liability Insurance
While you’ve spent countless hours training so you can give clients the best possible advice, there’s always a chance they may decide your recommendations resulted in a mistake or other issue and sue for damages. Professional liability insurance, or “errors and omissions” insurance, provides protection for any related negligent acts and covers your legal fees if a claim goes to court.
Workers’ Compensation Insurance
Most states require businesses to carry workers’ compensation insurance for their part-time and full-time employees. This coverage protects your employees if they become injured at work or fall ill after a work-related accident. It not only covers an employee’s medical bills and lost wages if they need time to recover but also any disability or death benefits stemming from a work-related accident.
Types Of Coverage Some Recruiters May Need
In addition to the policies outlined above, there are a few other types of coverage your recruiter may require depending on certain aspects of your operations. Some of these might not apply to you, so be sure to ask your agent which policies are right for your business.
Business Interruption Insurance
If a fire or other natural disaster forces you to temporarily close, you could lose important clients and revenue while you wait for repairs. Business interruption insurance would help cover your operating costs and lost revenue until you can reopen.
Commercial Umbrella Insurance
While your general liability insurance policy covers most claims, some accidents or lawsuits may be so catastrophic that they threaten to exhaust the limits of your primary coverage. Commercial umbrella insurance protects you from paying out-of-pocket for any legal fees and awarded damages that exceed your primary policy.
Additional Steps To Protect Your Business
Although it’s easy (and essential) to invest in business insurance, it should not be your frontline defense. Yes, insurance will compensate for your business’ financial losses after an incident occurs, but it’s much better to avoid losses altogether.
With this in mind, here are several things you can do to better protect your business:
- Use legally robust contracts and other business documents. (We offer free templates for some of the most common legal forms.)
- Set up a limited liability company (LLC) or corporation to protect your personal assets. (Visit our step-by-step guides to learn how to form an LLC or corporation in your state.)
- Stay up to date with business licensing.
- Streamline your business’ internal processes. This will remove unnecessary variables from common tasks and create a safe, consistent environment for conducting business.
- If your business is an LLC, look into LLC Insurance.
Steps After Getting Business Insurance
Depending on where you are in your business building process, here are some other actions you may need to take before getting started:
- If you’re just starting, finding the best name for your business is a great first step. Check out TRUiC’s Business Name Generator.
- After finding the perfect name, get a logo with our Logo Generator.
- Every business needs a website. Using a website builder like the GoDaddy Website Builder or Wix makes building a website simple and fast! Check out our review of the Best Website Builder.
Business Insurance is the Best Way to Protect Your Business
If you're starting a new business, then you need business insurance. It's as simple as that. The protection offered by an LLC will protect your personal assets, but your business's assets are still open to liability in the case of a lawsuit or other loss.
Be sure that everything you've built is safe by getting business insurance.
Frequently Asked Questions
What is included in a business owner’s policy?
A typical business owner’s policy includes general liability, business interruption, and commercial property insurance. However, BOPs are often customizable, so your agent may recommend adding professional liability, commercial auto, or other types of coverage to your package depending on your company’s needs.
What is the difference between business insurance and general liability insurance?
"Business insurance" is a generic term used to describe many different types of coverage a business may need. General liability insurance, on the other hand, is a specific type of coverage that business owners need to protect their assets.
Do I need insurance before I start a business?
You should invest in insurance coverage for your business before your first interaction with a customer. Although the cost of insurance may seem high for a brand new business, it’s best to be proactive when it comes to protecting your assets. After all, you can’t buy insurance to cover a loss that has already occurred.
Will insurance protect my business from everything?
Not necessarily. Certain exceptions may be written directly into your policy, and some perils may be entirely uninsurable. Be sure to discuss the scope of your policy in-depth with your agent to avoid being blindsided by holes in your coverage.