Public Liability & Professional Indemnity Insurance - required?

[Rivendell]

Hi,

I've just secured a new contract working on a client site and work under the standard Ltd company contractor model. This is my first ever contract and have been asked by the agent to send copies of my Public Liability and Professional Indemnity insurance certs. I have neither of these in place. I'm guessing the second is very much down to personal choice? But is the first one a 'must have'? I thought that while working on client site, you would be covered by their own employer's liability insurance?

Thanks

[Clare@InTouch]

Hi,

I've just secured a new contract working on a client site and work under the standard Ltd company contractor model. This is my first ever contract and have been asked by the agent to send copies of my Public Liability and Professional Indemnity insurance certs. I have neither of these in place. I'm guessing the second is very much down to personal choice? But is the first one a 'must have'? I thought that while working on client site, you would be covered by their own employer's liability insurance?

Thanks

Expecting to be covered by employer's liability insurance is something you'd expect of an employee - which you're not. Getting your own insurances in place therefore indicates more of contractor mindset, and could therefore help in regard to IR35.

A lot of contracts will also require it to be in place.

[Qdos Contractor]

Neither Public Liability nor Professional Indemnity are required by law. Employers Liability is, but there's an exemption for companies only employing their owner.

Agencies and end clients do often require them though, so many contractors will take them out. Plus it strengthens your IR35 position if working outside. For the sake of a couple of hundred quid it does normally make sense to have them in place.

But I would say that.

[malvolio]

If it's in your contract that you should have it, then you should have it. Contract conditions are not optional once you've signed them

[Robot]

Employers Liability is, but there's an exemption for companies only employing their owner.

Most contractors employ a spouse therefore the company has an owner and employee, presume Employers Liability would be required in these circumstances?

[Qdos Contractor]

Most contractors employ a spouse therefore the company has an owner and employee, presume Employers Liability would be required in these circumstances?

The wording on the HSE guidance notes is:

"The following employers are exempt...companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company"

So it probably depends on shareholding; i.e. if it's a 50/50 share split the spouse is also an 50% owner. If the spouse owns less then technically it would be required.

[Rivendell]

Most contractors employ a spouse therefore the company has an owner and employee, presume Employers Liability would be required in these circumstances?

Going off on a tangent - and hoping this isn't too much of a stupid question - but why do most contractors employ a spouse?

[Clare@InTouch]

Going off on a tangent - and hoping this isn't too much of a stupid question - but why do most contractors employ a spouse?

Tax. If your spouse doesn't earn elsewhere then you can use their tax free allowance to pay them a small salary for admin work. Under certain circumstances you can also issue them shares to pay them dividends, whcih are effectively tax free up to higher rates.

[northernladuk]

Its around £200 tops and you can claim it against tax. It's peanuts. Buy it and forget it. Bigger things to fret about out there.

QDOS do it.