Professional Indemnity Insurance + Employers Liability Insurance

[wantacontract]

Hello All,

Newbie here, looking to secure a contract being a project manager!!! Now I have set up my ltd company already...but at a bit of a crossroads on the two insurances above.

Having read the PCG guidelines, they advise getting both.....

PII for obvious reasons, but it seems to be mainly for IT Consultants and engineers, as a project manager = still required?

Employers Liability from PCG:

"In a letter to PCG, the Department of Work and Pensions confirmed that if a limited company employs only the owner, and that owner owns more than 50 per cent of the issued share capital, then the company is exempt."

So that would mean I am exempt. But then in the next paragraph:

"As a freelance consultant or contractor operating outside IR35, however, you are likely to have a substitution clause in your contracts. Without employers’ liability insurance, you cannot fulfil this clause without breaking the law, so in practice you ought to have cover."

??? So in would be in my best interest to have ELI??

I have spoken to another contractor who is an engineer that has his own company and he hasn't taken out ELI, and said to rely on the agencie's..

Please advise.

Thanks.

[pickle]

Hello All,
"As a freelance consultant or contractor operating outside IR35, however, you are likely to have a substitution clause in your contracts. Without employers’ liability insurance, you cannot fulfil this clause without breaking the law, so in practice you ought to have cover."

Surley I would substitue via another (limited company) contractor, ie by sub contracting out. No employer-employee relationship there.

To be honest, Ive never bothered with either of these insurances. I figure Im only worth suing WITH the insurance. But then I've never been exactly risk averse.

[Pondlife]

I have spoken to another contractor who is an engineer that has his own company and he hasn't taken out ELI, and said to rely on the agencie's..

You are NOT an employee of the agency and so would IMO not be covered by any of their insurances.

If you are a Ltd Co then I think it's a legal requirement to have Public Liability insurance. Emp Liab Ins can often be bought with the PL Ins.

Personally MyCo has PI (£100K + £1M shared), ELI & PLI from one of the PCGs offers for about £200 per year (tax deductable of course).

If you are a PM and are grossly incompetent or are directly responsible for certain sucess criteria then it's well worth it.

HTH

[Fleetwood]

said to rely on the agencie's..

Ouch....

[oraclesmith]

For sub-contracting, the key is in the contract. There are various detailed requirements which must be met for the prime contractor (you) to be exempt from Employees Liability insurance. eg. specific clauses in the contract. If you end up sub-contracting to agency staff, you probably won't know what legal structure they actually have and there is always a possibility someone may make a surprise claim if they have a serious accident and get hold of one of these accident claims specialist lawyers.

I pay the insurance. It's not much and I get some other insurance (eg. office equipment, public liability etc) bundled in it, from Caunce O'Hara. In my opinion it's not worth dodging it.

[malvolio]

Join the PCG properly. Get their discounted PI insurance and you will also get PL and EI and their rates are half anyone else's. You rarely need EI, but if it's free and bundled in, who cares.

[DeadKenny]

I've been wondering which insurance is better, Caunce O'Hara or the discounted one through PCG (Randell Dorling).

The former is available here or through SJD for the same price, but people's quotes of £165 seem to only apply to getting PI on it's own. I need at least PI and Public Liability which means getting the combined insurance which bumps it up a fair bit as it includes equipment insurance. I'm not so sure I need equipment insurance as all equipment would be work supplied though I use a laptop to deal with running my company, but currently that's a personally owned laptop and covered on house insurance. My turnover bumps it up a bit also, so it works out twice as much as the PCG insurance, however it might be much better cover.

PCG's has optional equipment cover but doesn't have stuff for equipment off site and travelling which Caunce O'Hara does (optionally). If I went for equipment cover I'd rather cover it for that in case I take my laptop somewhere.

So is PCG's insurance cost effective or just basic cover and cheap?

Not sure what Caunce O'Hara's legal cover is. I've got PCGPlus membership which covers IR35/tax/etc investigations, so would this just be the same?

Silly thing also, I prefer Caunce O'Hara's web site design (and like the idea of buying through SJD who I'm using for accountants).

[malvolio]

Why are you asking us? Why not ask the PCG? I hear they even have email these days..

Not that it will help, but:

The membership covers Tax Investigations from the ground up to the Specials. It has nothing to do with PI, which, if you go for the PCG offer gives the average contractor sufficient PI, ELI and PLI for most eventualities. If it doesn't, you'll have to go to the open market and get quotes - which will be way above the £200-odd the PCG are offering it for. Equipment is another issue again and you should get quotes from three sources and pick one if you really need it. Never seen the need myself, mind. The RD equipment coveris optional and may or may not be the most cost effective, but their PI/PLI/EI cover is the cheapest going by a long way.

[DeadKenny]

Just asking for opinions that's all given experiences of those who have already gone through this. PCG will of course advise on what they offer, not what is better when comparing alternatives. I will of course ask anyway, but will have to wait for a reply in office hours. Doesn't hurt to get other opinions. Thanks anyway.