Business Insurance cover

[polarbearuk75]

Hi

I am an IT contractor (with a new Ltd company) in the enterprise / financial services sector mostly doing advisory / digital transformation / project management. I am not coding / or providing hardware etc. Just advising clients etc on what and how to do it. My project could be up to £1m. My Ltd company maybe turning over up to £200k max.

I am fairly new to contracting, having moved from permanent. I am about to start a new outside IR35 contract/consulting with a very old contact. The contract I am about to sign has stated the following insurance limits for my Ltd company.

Professional indemnity £2,000,000
Public and products liability £2,000,000
Employers’ liability £10,000,000
Legal protection £100,000 (I assume this to mean D&O cover)
Crisis containment £25,000 (I assume this to mean - if my mistake went public and i ended up on TV this would cover for PR etc.)

A couple of questions

- Would you say these limits are usual and reasonable? As I have had some quotes back which start at £800+ a year.
- Any suggestions for good brokers?
- If this is normal should I be looking at any other cover and add-ons to play it safe? e.g. IR35 insurance?

Many thanks for any advice.

[Andy Hallett]

That seems high. I pay less with Kingsbridge, if they don't beat that ask for the Andy Hallett deal!

[ladymuck]

Technically, unless you do actually have employees, you don't need EL cover. However, getting that concept across for the sake of saving a few quid is a challenge.

I use Caunce O'Hara (no ladymuck specials available). I have all of those except crisis containment and pay <£500 a year.

To further answer your question. The limits are reasonable and common.

The thing about IR35 insurance is that you can only get it if the insurer (like Qdos) thinks the likelihood of a claim is minimal, which tells you how much it's worth really...

[Protagoras]

Legal protection £100,000 (I assume this to mean D&O cover)
Crisis containment £25,000 (I assume this to mean - if my mistake went public and i ended up on TV this would cover for PR etc.)

I'd want to be sure about what is meant by these terms rather than assume anything.

- Would you say these limits are usual and reasonable?

Yes

- If this is normal should I be looking at any other cover and add-ons to play it safe? e.g. IR35 insurance?

Presumably, given the nature of the projects, your clients are 'large' in which case off-payroll status is a matter for client determination. Just beware of off-payroll 'indemnity clauses' ... there are lots of posts on here about these.

However, if your LtdCo is responsible for IR35 status then it would be prudent to have professional assistance with determination and have insurance cover in place for legal costs.

[northernladuk]

Bloody permies coming over here and stealing our jobs.

[Costa]

Hi All,

May be not directly relevant to the original question in this thread, but had a quick query about IR35 Insurance, so thought will ask here. (Posted in another thread too, an reposting here, to increase the visibility / responses )

We have taken IR35 Insurance from Qdos. It is on the company name, and we pay through Limited Company business bank account. Is that cost an allowable Limited Company expense or not? Are there any relevant links / articles from any tax experts that I can read to confirm this?

(Background is that we thought it will be an allowable Limited Company expense, but our accountant doesn't agree. So trying to find out what other accountants / tax experts say.)

Thanks in advance.

[malvolio]

Hi All,

May be not directly relevant to the original question in this thread, but had a quick query about IR35 Insurance, so thought will ask here. (Posted in another thread too, an reposting here, to increase the visibility / responses )

We have taken IR35 Insurance from Qdos. It is on the company name, and we pay through Limited Company business bank account. Is that cost an allowable Limited Company expense or not? Are there any relevant links / articles from any tax experts that I can read to confirm this?

(Background is that we thought it will be an allowable Limited Company expense, but our accountant doesn't agree. So trying to find out what other accountants / tax experts say.)

Thanks in advance.

The test is "wholly and exclusively". The argument (long ago determined by IPSE about their own membership fee but generally applicable) is that you wouldn't need the insurance if you didn't have the company, so clearly it passes that easily.

I would ask your accountant for a detailed answer as to why they think differently. I wouldn't trust an accountant who doesn't seem to have got their head around the differences between a Ltd Co, a sole trader, a worker and an employee...

[edison]

Hi All,

May be not directly relevant to the original question in this thread, but had a quick query about IR35 Insurance, so thought will ask here. (Posted in another thread too, an reposting here, to increase the visibility / responses )

We have taken IR35 Insurance from Qdos. It is on the company name, and we pay through Limited Company business bank account. Is that cost an allowable Limited Company expense or not? Are there any relevant links / articles from any tax experts that I can read to confirm this?

(Background is that we thought it will be an allowable Limited Company expense, but our accountant doesn't agree. So trying to find out what other accountants / tax experts say.)

Thanks in advance.

I'd be a bit concerned if my accountant gave me that advice and would be looking for a new one unless they came up with some sound logic on their advice.

[Costa]

Thanks guys. I thought the same.

Just for my info - Do you happen to have a link to any article which discusses this point about IR35 insurance specifically? (Will help in my discussion with the accountant)

Thanks.

[Lance]

Thanks guys. I thought the same.

Just for my info - Do you happen to have a link to any article which discusses this point about IR35 insurance specifically? (Will help in my discussion with the accountant)

Thanks.

no. There's just no reason.
Even health insurance is a business expense. Just one that goes on a P11d and tax is paid by the recipient.