Standard Vs Non-Standard Contracts & where does Vicarious Liability Insurance sit within this?
Please note that all proposal and declaration forms under our Recruitment Insurance
products require you to provide a breakdown between temporary workers placed under
your Standard Terms of Business and/or any Non Standard Contracts. It is very important
that you provide your insurers with accurate information regarding the types of
contracts used when placing temporary workers, as failure to inform us of your
business activities may cause issues with insurers in the event of a claim, and in
some circumstances may lead to claims being rejected by your insurers. To assist you
with providing us with the correct information, this publishment will provide you with
guidance on the contract types and why your insurers require a breakdown between the two
types of contract placement.
Overview
The reason why insurers require wagerolls and turnovers split between temporary workers
placed under Standard and Non-Standard Contracts is simply to determine the possibility
of liability claims arising under the insurance policy. Once your insurers have an understanding
of the liability risk, they can then rate your insurance premium accurately.
Standard Terms of Business
You will have your own Standard Contract Terms, either provided by a legal adviser or templates
provided to you by an association such as the Recruitment and Employment Confederation or Lawspeed.
These contracts will include a liability clause which clearly states that you do not accept any
liability in respect of any injury or damage caused by the temporary workers, and that you will
not accept any liability for any errors and omissions made by the temporary workers while they
are working at the hirers premises.
This liability clause means that your insurers will be in a strong position to defend liability
claims on your behalf should any attempt be made by anyone connected to the placement of temporary
workers under this form of contract.
If you are asked to alter the liability clause in your Standard Contract Terms, then it will become
a Non Standard Contract as far as your insurers are concerned, as the changes may alter their chances
of successfully defending any claims.
Non Standard Contract Terms
This could either represent your own Standard Terms of Business where the hirer has insisted on changing
the liability clause or a third party contract which you have been asked to sign in place of your own
Standard Contract Terms.
It is very likely that a Non Standard Contract will include a liability clause that will require your
insurers to provide liability cover in respect of any injury, damage or errors and omissions made or caused
by the temporary worker you are providing.
The Professional Indemnity section can normally also be extended to include vicarious liability insurance for the
temporary workers errors and omission if you are asked to sign contracts that require you to provide this cover.
We hope you have this useful, should you have any further questions please do pop in a call.
