Contractor Indemnity in case of an issue

[twickamb]

Hello,

I keep thinking about a bad case scenario when an issue arrises and use of my LTD's insurance is needed. Lets suppose the client says something went wrong and they lost 7000 on cloud extra expenses/had to fix something and extra work was valued at that price etc/whatever. Bottom line is that there are claims I need to compensate for it. What happens next? Do I just ring up my insurance provider and ask for it? Or is there a dispute in court before the payout? On what basis would the insurance pay out the claimed sum? How does the bad case scenario work like please from a formal procedure?

[malvolio]

PI is there to (a) stop such things happening by challenging the claim and (b) paying out if it is unavoidable. How that works should be somwhere in your Insurer's paperwork.

[Lance]

on the plus side. If the client does come after you for your PI insurance that's a really good indicator of genuinely being in business.

[northernladuk]

Two points from me..

Best way to avoid problems is to be vigilant. Think about what you do, check backups, roll back, use change control, think and act properly.

Secondly I am not aware of anyone that has ever needed to claim so I think you are worrying about something that's never going to happen. I've had PI 15 years and I've never looked in to how it works, nor has any other contractor I've ever spoken to. It's to the point it's almost annoying to have it but it's contractual and it's peanuts so buy it from a reputable provider and just get on with your career.

[malvolio]

Two points from me..

Best way to avoid problems is to be vigilant. Think about what you do, check backups, roll back, use change control, think and act properly.

Secondly I am not aware of anyone that has ever needed to claim so I think you are worrying about something that's never going to happen. I've had PI 15 years and I've never looked in to how it works, nor has any other contractor I've ever spoken to. It's to the point it's almost annoying to have it but it's contractual and it's peanuts so buy it from a reputable provider and just get on with your career.

I know of one case - someone who cocked up a database backup, keeping the data but losing the index information so the client was left with a pile of 0s and 1s...

You don't hear of many because the idea is not to pay out but to defend the claim, and that is mostly successful. Does not mean it is not valuable.

[Guy Incognito]

I recently checked mine and the maximum turnover was less than my company so I was basically paying for nothing...

[SueEllen]

I recently checked mine and the maximum turnover was less than my company so I was basically paying for nothing...

When you are about to buy insurance read the small print before you buy it.

If in doubt that it will cover you ask the provider questions in writing.