Inspired Recruitment internal audit – Insurance and Indemnities (EL,PL,PI).
Inspired Recruitment recently conducted an internal audit, something we do on a regular basis to ensure REC and APSCo compliance and reassure ourselves that all the best practices on which we pride ourselves are being adhered to.
These internal audits are something that Inspired Recruitment is looking to do on a more regular basis with the imminent introduction of AWR and, on the back of this, more regular spot checks from REC, APSCo and indeed government compliancy departments who will be closely monitoring AWR.
Part of Inspired Recruitment’s audit, which is based around REC and APSCo code of conducts, is to ensure that all paperwork and documentation is in order in relation to Clients and Candidates. This may be to comply with Data Protection, Tax (IR35 in the case of Ltd Company Contractors) and best practice for our sector.
These audits may result in one of our team contacting clients and candidates to request sight of certain documents we may not possess or that are required on request by Inspired Recruitment, or the client, in line with the agreed terms of business, contracts for services etc.
During the most recent audit one area which was causing a little confusion was in relation to Insurance and Indemnities for Ltd companies.
Over 98% of Ltd Company contractors were able to produce the relevant certificates and proof of cover however 2% were not and, furthermore, felt that the policies were not required.
Whilst Inspired Recruitment are aware that Employers Liability (EL), Public Liability (PL) and Professional Indemnity (PI) are not legal requirements for a Ltd company where the only employee is the owner of the business or where the company consists of family members only, we do insist on all sub-contractors having the policies in place.
There are a number of reasons for this, a couple of examples being:
- It is widely acknowledged as good practise to have these policies in place by governing bodies, trade associations (the contracts used by Inspired Recruitment are standard REC templates) and Contractor trade bodies, amongst others.
- All clients that Inspired Recruitment works with require that any Ltd company sub-contractor have these policies in force to protect their business, property and own employees. All contracts pertain to the same and these requirements must be contained, back-to-back, in Inspired Recruitment’s contracts with the Ltd Company contractors.
- Having such policies in force is further protection against an IR35 investigation as it emphasises the point that the contractor is a legitimate Ltd company – one example here could be: the IR35 investigator will look at the right of substitution clause and will want to establish whether this clause is there merely as an anti-avoidance measure or is a legitimate right. If the sub-contractor had no EL in-force then it could be construed that they have no intention of employing any other staff (as it is a legal requirement once another employee is taken on to have such a policy in place).
- If you have signed an Inspired Recruitment contract for services and/or have been working on Inspired Recruitment timesheets then you are contractually obliged to have cover in place, regardless of opinion and stance in relation to this matter. No alteration to these terms can be made unless specifically agreed, in writing, by a Director of Inspired Recruitment and the end-user client.
Inspired Recruitment is fully committed to providing the most professional and ethical service possible and diligently observes these matters in order to achieve this, but also in order to protect clients, candidates and itself.
If you wish to discuss this matter further or, if you wish to speak with one of our approved insurance providers about obtaining cover, please do not hesitate to call one of our team today.
Nick Hardisty
MD – Inspired Recruitment Ltd.
Useful links:
http://www.rec.uk.com/home
http://www.apsco.org/
http://www.hse.gov.uk/pubns/hse40.pdf
http://www.contractoruk.com/
