The Recruitment & Employment Confederation (REC) has this month launched a new discounted credit insurance service exclusively for its members. The service has been developed in association with Dallas Kirkland (Professions) Ltd, the leading insurance brokers to the recruitment market, and GERLING NCM, one of the worldís largest credit insurance companies.
The service is designed to protect recruitment agencies from the risk of non-payment by their clients and REC members will receive a 10 per cent discount on standard premiums.
ìTimes are tough in many of the sectors served by the recruitment industry, and by the nature of our business, we are vulnerable to this,î commented Gareth Osborne, managing director of REC. ìFor example, the rate of insolvencies is growing steadily in two of our most important industrial sectors ñ manufacturing and construction. Indeed, according to Plimsoll Portfolio Analysis, 18 per cent of manufacturing companies are in serious financial danger. And in last year 2,334 construction companies went bust according to BDO Stoy Hayward and a further rise in insolvencies is predicted for this year and next.
ìIn addition the services industry which has been one of our strongest sectors in past years has seen an increase in insolvencies in 2002 of about 80 per cent compared with 2001. These figures could have a major impact upon recruitment companies over the next few years, and businesses need to start to look closely at how they are going to protect themselves against this risk.
ìWe believe that providing a reputable credit insurance product at a discount, through a leading broker and insurance company, is one way we can really help our members protect their businesses and trade with greater security in an unpredictable climate.î
The service can give up to 90 per cent indemnity to REC members* in the event of protracted non-payment by clients and client insolvency. That means that if a credit-approved client goes into insolvency owing 50,000 to an agency, that agency can claim up to 45,000 from the insurers*.
ìThe bulk buying power of the REC and the high standards of practice adopted by its members made them a very attractive proposition for insurers. We were able to negotiate low rates for a tailor-made product for members,î said Robin Kirkland, managing director, Dallas Kirkland (Professions) Ltd.
REC offers members protection against bad debt
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