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UK – Investigative reporter probes alleged insurance mis-selling

30 January 2014

Following allegations that staffing companies have knowingly mis-sold accident insurance to temporary workers, a reporter from newspaper The Mirror has gone undercover to investigate whether or not these allegations are true.

A reporter visited two staffing firms, including one that was publically accused, by Shadow Business Secretary Chuka Umunna in the House of Commons last week, of taking part in the mis-selling of unnecessary accident insurance.

Posing as a jobseeker, the reporter visited staffing firm Blue Arrow, part of the Impellam Group, and was offered catering work at Wembley Stadium at the minimum wage. According to The Mirror, the interviewer, who only gave the name Cosman, advised the undercover reporter of the company’s accident insurance scheme.

Cosman is reported to have said: “This covers you in case anything happens at work; you trip, you fall down the stairs, I don’t know, you get cut with a knife, you get burnt with hot water or whatever. We recommend everybody to do it because if, God forbid, anything should happen to any of you guys we don’t cover anything. It’s for you own safety, plus it’s not a lot of money.”

The undercover reporter was advised that the insurance would cost £2.50 per month, depending on the number of hours worked. However, The Mirror claims to have seen payslips from Blue Arrow workers showing a weekly deduction of £2.50. The newspaper also claims to have seen evidence that the insurance scheme costs companies as little as £0.03 per worker per week.       

When contacted by The Mirror, Delaware North, the catering company at Wembley Stadium, advised that the additional insurance was unnecessary. A company spokesperson said: “Any person who works for Delaware North, whether engaged directly or via an employment agency, is covered by our employers’ liability insurance. No charge is, or has ever been, made by us to any worker for this insurance cover. It is provided as a matter of course.” 

At the time the article was printed by The Mirror, Blue Arrow had not provided responses to questions about its accident insurance costs and charges. A spokeswoman for the recruitment firm said that the policies are optional and provide additional cover for workers. She added that the firm was aware of concerns and advised that they are reviewing all aspects of their service, including the accident insurance.

The undercover reporter also visited Birmingham-based staffing firm Simply Recruit. The reporter was offered courier work for delivery company Yodel on a rate of £7.50 per hour. Once again the ‘jobseeker’ was advised that they would not be covered by other insurance if they chose not to opt for the accident insurance scheme offered by the recruitment firm.

The interviewer said: “If you choose to be not insured and you bump into someone [while driving] and the other person has whiplash, then it goes through your insurance.”

The interviewer reportedly insisted that this would still be the case even if the reporter was driving a van owned and operated by Yodel. When challenged by the reporter about how this was possible, the interviewer was reportedly unable to answer.

When contacted by The Mirror, Yodel advised: “All of the workforce driving our vehicles are fully covered by Yodel’s insurance.”

The repercussions for staffing firms for mis-selling accident insurance could be significant and costly, if the recent payment protection insurance (PPI) scandal is anything to go by. Major high street banks were forced to repay customers millions following revelations that they were sold unsuitable and unnecessary insurance. The subsequent financial impact on the banking sector has been substantial.

However, it is important to recognise that the provision of such insurance can be justified when it covers temporary workers between contracts, and does not duplicate any coverage already provided by the recruitment agency or its customers. Should a temporary worker become unable to work between contracts through accident or injury, the insurance would provide them with a supplementary income. 


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Extraman Ltd

Adrian Gregory30/01/2014 1:31 pm

None of the policies I have seen do cover temporary workers between contracts. They are only effective when the worker is actually working, or on their way to and from work. We have been campaigning against these exploitative arrangements for a long time. The agencies claim that they are optional, but we have evidence that workers who do not sign up are unlikely to be offered work.

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