Indemnity Insurance

**Ardesco** · 14 January 2008, 12:30

Originally posted by LouC View Post

Hi all, and a good Monday morning, ho ho ho, etc

In my contract it states that I am liable for any financial balls-ups made by my company regarding work down for the client.

Really, as is the same for probably most people, this is utter kak. Who's going to sue the contractor? But just like for substition, working practices, etc, it's 'IR35-friendly' to allow for your own financial risk.

So, should I have the insurance my contract requires? Would it affect my IR35 status not to? Do any contractors have this insurance?

Many thanks
Lou

Depends on the company. I have worked for a company in the past who threatened to sue a contractor. They hauled him into a meating with the company lawyers and applied the thumb screws and scared the tulip out of him. If nothing else having insurance will give you peace of mind if this situation ever occurs.

Secondly bear in mind that you are in breach of contract if your contract says you must have it and you don't. This means that you could be kicked off the client site with no notice and they may be able to hold any funds owing to you, may take a whiel to get the cash out of them.

In summary:

Yes you should have this insurance.

Probably won't make a blind bit of difference either way in regards to IR35, but if your contract says you need it and you don't you are in breach of contract which is a big issue.

Yes I have it (I would expect most others do as well)

**BrowneIssue** · 14 January 2008, 12:54

Originally posted by LouC View Post

So, should I have the insurance my contract requires? Do any contractors have this insurance?

I have £10m worth which is abnormally high. Required for a government contract I did and I still have it in place.

Supposedly, no contractor has ever been sued. Yet?

As the contract requires it, you will always be in breach of contract if you don't have it. It's up to you if you are bovvered.

It costs about £200 - £350 per year.

**sumo** · 15 January 2008, 16:01

Originally posted by BrowneIssue View Post

It costs about £200 - £350 per year.

That's cheap, who do you use?

**vhadiant** · 16 January 2008, 10:22

Originally posted by sumo View Post

That's cheap, who do you use?

Indeed. My £1m cost £500 ish I think.

**Qdos Contractor** · 16 January 2008, 10:55

It does help your IR35 position, although it's obviously not pivotal. We always advise clients to hold some form of business insurance, even if it's never going to be used.

The cost of PI differs depending on your turnover, as well as the indemnity limit. For example, with our product a £1m policy for a contractor with less than £50k turnover is £250, whereas a £1m policy for a turnover of £150k-£200k is £500.

**Tensai** · 16 January 2008, 11:43

Cost also depends on the industry - anything involving oil, for example, is heinously expensive (believe me, I know!)

Yeah, I know the spelling of heinous is probably wrong...

**oracleslave** · 16 January 2008, 11:48

Originally posted by Tensai View Post

Cost also depends on the industry - anything involving oil, for example, is heinously expensive (believe me, I know!)

Yeah, I know the spelling of heinous is probably wrong...

Heinous is in fact correct.

HTH.

**BrowneIssue** · 16 January 2008, 11:54

Originally posted by sumo View Post

That's cheap, who do you use?

I am a BCS member, PCG member and an IAP member. Between them and CUK they recommend about 7 different companies. I phoned round all of them and of the 3 that actually bothered to respond with an estimate, I played them off against one another. I got a heavy discount for the memberships then dropped names.

So yes, £200-£350 is actually far less than I was originally quoted and I paid £354 in the end.

**rootsnall** · 16 January 2008, 12:25

Originally posted by LouC View Post

Hi all, and a good Monday morning, ho ho ho, etc

In my contract it states that I am liable for any financial balls-ups made by my company regarding work down for the client.

Really, as is the same for probably most people, this is utter kak. Who's going to sue the contractor? But just like for substition, working practices, etc, it's 'IR35-friendly' to allow for your own financial risk.

So, should I have the insurance my contract requires? Would it affect my IR35 status not to? Do any contractors have this insurance?

Many thanks
Lou

My current contract states I should have it, I told them it was a waste of time and wasn't going to get it, they said OK then. By getting insurance you do open up the possibility of them chasing you, without it why would they bother.

Indemnity Insurance