Apply due diligence around contractor insurance, APSCo advises

Recruiters must implement procedures to ensure that contractors have the correct insurance cover in place to mitigate reputational risk and demonstrate compliance.

That is the advice of the Association of Professional Staffing Companies (APSCo), whose recommendation is outlined in the trade association’s latest white paper, Contractor Insurance: The hidden risk in the recruitment supply chain, produced in conjunction with Kingsbridge Contractor Insurance.

The report outlines how 55% of contractors who are contractually required to hold insurance do not have cover in place, and offers advice on how consultancies can fulfil their duty of care to ensure contractors are well-informed.

Ann Swain, Chief Executive of APSCo, explained: “There is a growing emphasis on supply chains across government – and contractor insurance is part of that. By putting in place robust processes – such as implementing a barrier to placement and ensuring due diligence during a placement – recruiters can not only demonstrate compliance, but also ultimately protect themselves at a time when end clients are increasingly inserting clauses into terms specifying liability for the actions of contractors.

“However, while contractor clauses are becoming more commonplace, the reality is that even if a recruiter is confident that they don’t have contractual liability for the contractor’s work, they will often feel obliged to step in and offer a rebate in order to protect their reputation and long-term relationship.

“History teaches us that recruitment firms which adopt a more compliance-orientated approach are likely to be rewarded with commercial benefits that will protect their brand and improve long-term competitiveness.”