Requirement for PI and EL insurance

[northernladuk]

Couple of things to bear in mind though...

You are a business so not unreasonable to think you will leverage an opportunities at your client to get other people in so will need the extra insurance. If you are so adamant it is only you and will only be ever that isn't going to help you quest against IR35. To be a business a good start is to think like one.

You have a substitution clause in your contract. If the client/agent is going to allow you to send a sub in it isn't unreasonable of them to make sure you have the proper insurances for that sub should the need arise at short notice.

There will be 100+ contractors lining up behind you who either have it or will be willing to get it. If the cost of getting the edge on the competition to win some good business is the few hundred quid then I think that is a good deal.

[Andy Hallett]

I would imagine the reason that client insist on this is that if anything goes wrong as a result of something you do, they know that the shutters will come down as you simply couldn't (and wouldn't) wear a big claim. If you are insured, they are de-risked.

This sort of requirement will become more common in the UK.

Having worked extensively with our US operations the requirements that clients have in making sure everyone in the chain has their arse covered by insurance. I have no doubt that this will cross the pond to the City and filter out across the general market.

I have just done a deal with an insurance provider for our contractors that is appropriate for Ltd Company contractors, happy to pass on via PM if you request as wouldn't want to the forum.

[Ignis Fatuus]

It's an online forum so I can be my alternate persona, just like on Thursday nights when I am Samantha. I didn't think I need to practice being one on here though. I thought it was pretty common knowledge I was a pretty accomplished dick.

+1

Should we have a poll?

[GB9]

Can anyone advise please?

Can anyone offer advice or explanations I can use to get my client see sense?

Cheers

Public liability - you put a bag down in the middle of a passage, a client employee trips over it, breaks a leg, takes 6 months off recovering. They sue you for damages, the client sues you for damages. You either lose your house or you have PL that pays out.

Professional indemnity - You plug a cable into the wrong socket. It goes bang and takes out £200k of equipment with it. Can you pay the bill as its your incompetence that has caused the damage? PI will cover it.

My policy for the above costs around £250 for £2m cover. Its something a business would be expected to have.

[kaiser78]

Were you born a dick or did you come on here to practice been one?

NLUK has a point - for the sake of the QDOS cost get on a do it. If it is a meaty contract which I am guessing it is then this amount won't even touch the sides, and even goes down as a company expense.

You are probably spending more equivalent time on this forum arguing the merits of not taking it out than the cost of the cover itself. However ultimately it is up to you if you want to take it or not, this forum is simply a way of providing opinions / recommendations that are always non-binding.

[Gemma at Qdos]

Well thanks for the love on here guys!

But in reference to your question on why clients/agencies say you should have it, besides what they are actually covering you for;

They don't just protect your client, they also protect you.
Although EL is the only legally required insurance if you have more than one person drawing a salary from your company, if it is specified in your contract it is a contractual requirement.
The same goes for PI, it may not be legally required but if it is in your contract, it is a contractual requirement.
Sure you can try and get it removed, but if they won't budge, you're going to have to either get the insurance or go elsewhere.

Clients and agencies are increasingly requesting these insurances from ALL contractors regardless of their personal situation, especially agencies with standard contracts, so finding a client/agency who doesn't request these insurances is getting slimmer and slimmer and you're going to find yourself with slim pickings if you start turning down contracts because of it.

Nobody likes insurance but unfortunately, that's the world we live in. Hope this helps!

[smatty]

I've had agencies demand I had £1mil of public liability for roles that involved sitting at a desk producing Visio diagrams. I guess incase I print one out, it falls off the printer, the MD happens to be walking past with his Faberge Egg in his top pocket, slips over and crushes it.

Seems a bit excessive but providers like QDOS are pretty reasonable for this level of cover so easier to just get it. As mentioned above it seems to be the standard these days.

[GB9]

Well thanks for the love on here guys!

I love you. Marry me (unless you are actually a bloke called Geoffrey).

[BolshieBastard]

Yeah, I see that QDOS do the same level of cover than I get now, plus the PI (and more) for less than Im paying now. Thats an option.

My main gripe is that the client dont even know what the insurances cover and are just stating the same line over and over 'its mandatory' with no logical explanation why we need it.

Yes, I will pay it if i need to but why pay for something that I will never need, especially in the instance of the Employers Liability.

One of the managers on the HR side spoke to one of the other contractors who also recently started and he didnt even know what they were for and cant understand why they are been requested. At the moment we think its a legacy requirement from when they passed work to small companies that had a few employees.

We will see what transpires.

Well I just wonder what the other contractor would have said about IR35 and contract reviews etc.

Look, you asked for info \ advice and people have given it. You either accept it or dig your heels in with the agent and risk losing the role and having to pay a wedge out of your own pocket if the unexpected happens.

Its your call.

[Gemma at Qdos]

I love you. Marry me (unless you are actually a bloke called Geoffrey).

Trevor actually. But ssh