Impellam probe sparks credit insurance concerns

13-May-2009 | By Colin Cottell

On 16 April, Impellam launched an investigation into Recruits Events Services, a wholly owned subsidiary, and warned that its profits may have been overstated by £5m.

The following day, Interaction Recruitment was refused cover by HCC International, the UK’s fourth biggest credit insurer, when supplying staff through vendor neutral company, Comensura, part of Impellam. In a letter seen by Recruiter, HCCI says: “Regret cover cannot be given”because of “accounting errors at one of the subsidiaries”.

Andrew Gilchrist, managing director of Interaction, told Recruiter that rather than take the risk of bad debts he wouldn’t supply through Comensura. Recruiters take out credit insurance so they aren’t out of pocket if clients fail to pay them.

Andrew Burchall, Impellam’s group finance director, told Recruiter: “For any recruiters who don’t want to supply through Comensura there are others who do want to.”

However, insurance brokers, who scour the market to find the best credit insurance for recruiters, have told Recruiter of problems with the availability of credit for recruiters supplying staff through Comensura.

Nick Flux, a broker at UK Credit Insurance, told Recruiter: “Most of the insurers came out of the Impellam Group in November.”

John Lupton, managing director of insurance brokers, LDPA Credit Insurance, told Recruiter that two major insurers were refusing credit insurance for recruiters wishing to work through Comensura.

Burchall responded: “Well that’s news to me,” adding, “none of the insurers have spoken to me.”

A spokesperson for Comensura told Recruiter: “Given that most of our clients are public sector firms, then we would question the need for this type of cover for our suppliers.”

HCCI did not respond to Recruiter’s requests for a comment. Other insurers said they didn’t comment on commercial relationships.