Dear Jeff:

I am a regular reader of the Fordyce Letter and especially enjoy your Jeff’s On Call! column. Your information is very interesting and helpful to our industry.  You provide excellent advice, experience, and insight into various employment law issues!

Below is a paragraph from a good client’s contract. As you can see, they are asking for general liability insurance. I asked them about my exposure as a recruiter. You will see their response below. It is my understanding that general liability insurance will not provide the coverage they indicate. What are your thoughts?

10.  INSURANCE  RECRUITER shall maintain in full force and effect, at their own cost and expense, and in a form acceptable to us general liability insurance in the amount of $1,000,000.00 per occurrence, general aggregate limit of $2,000,000.00.  This insurance shall be kept current and in force for the term of this Agreement.  All policies must be written through an insurance company with an overall A.M. Best Rating of B+ or better.  RECRUITER must provide a certificate of insurance evidencing compliance with the above requirements upon request. 

We are looking for recruiting firms to carry insurance in the amount of $1,000,000 per occurrence to cover issues from their recruiting of an individual. For instance, if you recruit and we hire someone that you knew or should have known had a propensity towards violence and then the employee you recruited goes on a shooting spree, then you have insurance to cover the negligent hiring. Does that make sense? It is more along the lines of employment liability. We have had recruiters with other types of coverage also.

Thank you!

Howard Lehman

Hi Howard,

It’s a pleasure assisting you and our JOC readers across the placement plain!

When you ask me about your exposure as a recruiter, I answer a little differently than your client. I answer in four syllables: “UN-LI-MI-TED.”