Small recruitment firms have a number of requirements at the start-up phase. Insurance is an important item for your business and one that can be easily overlooked, especially for a start-up venture that may be home based. Here is a list of some of the different types of insurance you may want (or need) to procure:
- Property insurance—covers your property in the event of damages or theft; may or may not cover water/flood damage.
- General liability—pays claims that may be owed to others if you cause an injury or other damage.
- Professional liability / E&O—small recruitment firms may be tempted to skip errors & omissions insurance, but this specialized liability insurance covers you in the case of professional errors, like inadvertently forwarding a candidate’s resume to their current employer, leading to termination.
- Business interruption—As the name suggests, business interruption insurance covers your lost income if you are unable to operate your business after a covered loss, like property damage.
- Business owners policy—These policies frequently bundle business interruption, property, and liability under a single offering.
- Key person—Also known as key man insurance, this is a business life insurance policy that protects against loss if a business owner, partner, top executive, or essential employee dies. Since many small recruitment firms are owner-operated, it’s smart to consider this type of coverage to ensure business continuity in the event of an untimely death.
- Cybersecurity insurance—You may also have heard this referred to as “data breach” insurance. If you are conducting business online, whether that is accepting payments or handling sensitive personal details, consider purchasing this type of insurance. It covers data breaches if your data is hacked or compromised and can also provide coverage against ransomware or other cybersecurity threats. This may be especially important if your business involves staffing or temporary work. If you outsource your financial processes, check to make sure your vendors are covered for these types of threats, which continue to grow with devastating impacts.
- Workers compensation—In the United States, employers with 1 or more employees are required to have workers compensation insurance for their employees. Depending on your state, a sole proprietor may not be covered, so this is something you’ll want to explore with your insurance professional.
- Life / Disability insurance—As a business owner, life and disability insurance is important for you and is also a benefit you may wish to extend to your employees.
- Health insurance—Employers with 50 or more employees are required to provide health insurance coverage. Small recruitment firms likely fall under this threshold, but you may need to insure yourself and your family at a minimum. Again, this is a benefit you may wish to offer to your employees as well.
Insurance provides both protection and peace of mind. Make sure your budget includes the cost of premiums and don’t overlook the value of E&O or key person coverage.