Insurance...?

[LouC]

Hi everyone

I've been contracting about 6 years now, and have maybe had Indemnity insurance for perhaps 3 years of that. I'm pretty sure it's lapsed now, but before I renew I thought i'd get the opinion of my fellow contractors. So:

Who has insurance? Who with and for how much (in the past I think mine was for £250k)? If not, then why not? Is it essential? How does it affect things like IR35?

Cheers
Lou

[VectraMan]

I had the Randell and Dorking policy for 3 years, but I'd let it lapse whilst on the bench. But now I have a 6 week gig I'm wondering if I need to renew it - not sure. Surely the employee bit doesn't really apply, and if you get sued the limit of your liability is the money in your company. I'm thinking it's not worth the £178.

[northernladuk]

Peace of mind isn't worth 178 quid a year?? I would beg to differ. Granted it depends what you are doing. If you are a system admin that seems a bloody bargain when at root level access in business critical areas. Maybe not so for Service Delivery.

If you are going to gamble on PI/PL insurance you might as well go the whole hog and cancel your life and house insurance.

IMHO its stupidly cheap for something that could be potentially very serious.

[Clare@InTouch]

Hi everyone

I've been contracting about 6 years now, and have maybe had Indemnity insurance for perhaps 3 years of that. I'm pretty sure it's lapsed now, but before I renew I thought i'd get the opinion of my fellow contractors. So:

Who has insurance? Who with and for how much (in the past I think mine was for £250k)? If not, then why not? Is it essential? How does it affect things like IR35?

Cheers
Lou

With regard to IR35, it won't be a deciding factor but it would be a pointer away from employment. Holding insurances proves you accept you have the risk of being sued if you don't do the job right, which is unlike an employee who pretty much expects never to be held liable finacially.

[VectraMan]

Peace of mind isn't worth 178 quid a year??

Peace of mind for what? Yourco gets sued for a million pounds, but Yourco can only afford £100, goes bust, you start Yourco v2 and carry on. Not a good way to do business I agree, but you haven't technically done anything wrong, and your reputation with that client is harmed either way. Without the insurance there's a slim chance you lose whatever money is in the company, but with the insurance you definitely lose 178 pounds per every year.

But FWIW, I've just looked at my new contract and it said "thou shalt have insurance", and "thou shalt make the certificate available on request", so I've stumped up the money. Which is the point: if the client or agent insist on it, then it'd be stupid to lose a contract because you didn't have it, but do you need to have it otherwse?

[LouC]

Thanks everyone...interesting to note the different reactions...

Do you think it matter how much the insurance is for, eg if it's for £250k or £1 million? (i'm thinking here in terms of IR35...)

[northernladuk]

Thanks everyone...interesting to note the different reactions...

Do you think it matter how much the insurance is for, eg if it's for £250k or £1 million? (i'm thinking here in terms of IR35...)

The value has no basis on IR35 at all. That is just how much it will pay out. The fact you have it at all is the IR35 flag (albeit a minor one) QDOS standard one is 1 Mil I think.

[Clare@InTouch]

Thanks everyone...interesting to note the different reactions...

Do you think it matter how much the insurance is for, eg if it's for £250k or £1 million? (i'm thinking here in terms of IR35...)

In terms of IR35 I doubt it, but the contract will likely stipulate the values they want you to have.

[Papavar]

I've gone for the £1m in the past...

[The_Equalizer]

This is not very scientific, but if it only costs £178 for £250K worth of cover you would presume that the insurance company must rate the risk as very low.