Insurance for construction recruitment agencies: Key risks and protection considerations

Construction recruitment is one of the highest-risk areas of the staffing industry. Whether you supply plant operators, electricians, scaffolders, groundworkers, site managers, or general labourers, your candidates often work in environments with significantly higher injury and property-damage rates than most UK sectors. Research shows the fatal injury rate in construction is around five times the all-industry average, placing construction labour supply firmly in the high-hazard category for insurers and regulators.

For recruitment agencies, this risk does not sit only with the construction site. Many claims and disputes trace back to agency-controlled factors such as vetting, qualification verification, documentation accuracy, and clarity on supervision responsibilities. Insurers will often look closely at whether your agency took reasonable steps before placing a worker, particularly in higher-risk roles.

Kingsbridge Recruitment Insurance provides specialist cover built for the recruitment and umbrella sectors, including construction recruitment agency insurance. Our aim is to help your agency stay contract-ready, compliant, and protected against the risks unique to site-based placements.

If you would like to explore protection designed for construction recruitment, you can request a quote here or speak with our specialist team on 0330 124 9590, and we will help structure cover that reflects your agency’s work and client requirements.

Why construction placements carry elevated liability

Higher injury risk for temporary and agency labour

Temporary construction workers experience higher injury rates than directly employed workers. Shorter assignments, inconsistent supervision, and unfamiliarity with the site all contribute to elevated exposure. These “human factor” issues frequently appear in incident investigations and form part of your shared duty of care. Common accident types include:

• Slips, trips, and falls
• Falls from height (around half of construction fatalities)
• Being struck by moving vehicles or objects
• Contact with machinery
• Electrical injuries

Property-damage exposures

Third-party property damage is generally low frequency but high severity. Incidents involving plant, utilities, structural elements, or neighbouring assets can result in significant costs when repairs, delays, and legal fees are factored in. Large projects can face substantial daily delay penalties.

Contractual liability and vicarious exposure

Over 90% of tier-1 construction supply agreements include indemnity or hold-harmless clauses that shift certain responsibilities onto the recruitment agency. This creates a unique challenge, as the worker operates under the client’s supervision, but contractual terms may still direct liability back to your agency if something goes wrong. Plant misuse, PPE breaches, or errors involving site vehicles often feature in vicarious liability disputes.

Vetting, documentation, and compliance pressures

Construction clients have stringent onboarding requirements. Research shows:

• Almost all major PSLs require CSCS verification through Smart Check
• Invalid or expired CSCS cards account for 30–40% of audit failures
• Missing right-to-work checks, expired qualifications, and gaps in training records make up 40–50% of documentation issues
• Agencies are cited in over 60% of worker removals during site audits due to documentation gaps

This is why evidence-based vetting and robust record-keeping are essential in construction supply.

Claims examples in construction recruitment

Serious injury claim

A temporary labourer suffers a fall after being assigned a task requiring experience they did not hold. The contractor alleges negligent placement. Serious construction injury settlements often exceed £30,000 and can rise well above £200,000.

Project delay dispute

A plant operator damages underground utilities, stopping work across the site. Delay penalties on major infrastructure schemes can reach tens of thousands per day. Even where fault lies primarily with the contractor, agencies may still be drawn into enquiries if vetting or induction documentation is questioned.

Documentation-related PI claim

A worker’s expired HS&E test invalidates their CSCS card during an audit. The client seeks recovery for project disruption. Documentation gaps account for a notable proportion of PI claims in construction recruitment.

A Professional Indemnity policy may assist with legal defence costs and compensation, subject to policy terms, conditions, and limits.

Essential insurance covers for construction recruitment agencies

Kingsbridge Recruitment Insurance works with A-rated insurers to provide cover designed for the recruitment sector, including construction supply. Our policy offering includes the following benefits.

Professional indemnity insurance (PI)

PI supports your agency if a client alleges financial loss arising from your professional service or advice. In construction recruitment, this might include:

• Negligent placement
• Misrepresented competence
• Errors in vetting or documentation
• Disputes linked to your contractual obligations

Some construction PSLs request higher PI limits due to the value of projects involved. Depending on your wording, PI may also include a vicarious liability extension.

Public liability insurance (PL)

PL covers injury or property damage claims from third parties. Ultimately, if a contractor causes injury or property damage, if under the client supervision, an agency who is brought into legal proceedings your insurance should redirect the claim to the end client. If the contractor is responsible for themselves, they should hold their own insurance in place. But your policy should cover your legal defence as an agency if you a pursued..

Employers’ liability insurance (EL)

A legal requirement for UK businesses that employ staff, including PAYE temporary workers under your control. Many construction frameworks request £10 million EL limits.

Vicarious liability

This extension may help protect your agency if you are held responsible for the actions of a worker you supplied, even if that worker was supervised by the contractor. It is often expected in construction PSLs and is included under Kingsbridge PL policies and may extend under PI depending on terms.

Drivers’ negligence

Relevant when supplying plant operators or HGV drivers. Damage to vehicles or machinery often falls between £5,000 and £15,000. Clients may require evidence of this cover within your insurance schedule.

Management liability

Provides protection for directors and officers facing allegations of wrongful acts, breach of duty, or governance failures.

Legal expenses

May help with the cost of contractual disputes, employment disagreements, or certain regulatory investigations.

PSL requirements for construction clients

Construction recruitment often requires agencies to meet higher insurance thresholds than other sectors. Main contractors may ask for:

• Professional Indemnity limits aligned to project value
• Public Liability limits up to £10 million
• Employers’ Liability at £10 million or above
• Explicit evidence of vicarious liability extensions
• Confirmation of drivers’ negligence cover where relevant

Having clear and up-to-date documentation may support smoother onboarding and demonstrate professionalism.

Protecting your construction recruitment agency

Construction recruitment is complex, high pressure, and subject to strict compliance expectations. A specialist insurance programme may help support your agency’s ability to meet contractual requirements, manage claims effectively, and remain resilient when unexpected issues arise.

Kingsbridge Recruitment Insurance provides sector-specific protection that reflects the realities of construction supply. Our dedicated team, specialist wording, and in-house claims support are here to help your agency stay contract-ready and protected.

Common questions from construction recruitment agencies

What insurance requirements do UK main contractors typically expect?

Main contractors often ask for evidence of robust insurance before onboarding. Requirements differ by project, but agencies may be asked for:

• Professional Indemnity, often between £2 million and £5 million and sometimes on an Any One Claim basis
• Employers’ Liability at the legal minimum of £5 million, though some clients request £10 million
• Public Liability limits between £5 million and £10 million
• Clear confirmation of vicarious liability within PI and/or PL schedules

These expectations reflect the higher-risk nature of construction environments.

Is negligent placement or vicarious liability the greater exposure?

Both exposures are relevant in construction recruitment, but they relate to different issues:

• Negligent placement (typically a PI matter) concerns potential errors in your agency’s vetting or documentation.
• Vicarious liability concerns the actions of a placed worker, where contractual terms may hold your agency responsible for property damage or injury caused by that worker.

Given the nature of construction tasks, contractors may expect agencies to have cover that addresses both.

Does Employers’ Liability insurance cover PAYE temporary workers on site?

No, a PAYE temporary worker should be operating under the supervision, direction and control of the end client. If any Employers Liability proceedings are brought against you for a PAYE temporary worker, your insurance should legally defend to redirect the claim onto the end client. But it will cover your legal defence costs during the process.

What happens if an agency misses key vetting checks such as expired CSCS cards?

If a worker’s expired or invalid certification contributes to a site audit failure or operational disruption, the client may allege professional negligence. In these circumstances, PI cover may help with legal defence costs and compensation, subject to the policy wording.

Why might a construction recruiter need drivers’ negligence cover?

Where your agency supplies workers who operate client-owned vehicles, client contracts may require you to accept contractual responsibility for accidental damage caused by that worker. Drivers’ negligence cover may assist with repair costs associated with this exposure. Be aware that Plant is excluded under Public Liability and Drivers Negligence. If you are also responsible for Plant Operators Negligence, a separate extension on the insurance may be required.

Do agencies placing technical or engineering roles need higher PI limits?

Some clients may request higher PI limits for roles with increased financial responsibility, such as engineers, senior site managers, or technical specialists. Contractors often align required PI limits with the potential scale of financial loss.

Does recruitment insurance cover clinical or medical negligence on construction sites?

Recruitment agency insurance does not cover clinical negligence. If your agency supplies medical personnel, you may wish to check whether additional specialist cover, such as a medical malpractice extension, is required. PI may assist where the claim relates to administrative or vetting issues rather than clinical decisions.

How does digital construction technology affect cyber and data risks?

Agencies working with BIM platforms, Vendor Management Systems, and digital verification tools handle sensitive project data. Accidental disclosure, mis-send incidents, or cyber compromise could lead to investigations or client disputes. Cyber liability insurance may help with incident response and associated costs.

What is run-off cover, and why might clients request it?

Run-off cover protects your agency against claims made after the business has stopped trading, retired, or changed structure. Some construction clients may request evidence of run-off cover for a set period due to long liability windows in the industry.

Can Kingsbridge Recruitment Insurance help with PSL documentation requirements?

Yes. We can help ensure your insurance documentation clearly reflects the limits and extensions commonly expected in construction supply. Up-to-date certificates and schedules may support smoother onboarding with main contractors and frameworks.

Ready to speak with a construction insurance specialist?

If your agency supplies workers into construction sites, frameworks, or industrial environments, having the right insurance in place may help you meet onboarding requirements and protect your business from unexpected costs.

You can:

• Fill in the form to request your specialised quote, or
• Call our specialist team on 0330 124 9590 to discuss your agency’s needs and the cover options that may suit your client contracts.

Our team is here to provide clear, sector-focused guidance and help ensure your documentation is ready for contractor or PSL review.