Query re Group PI vs Personal PI for IR35

[mediacity]

In my view, PI is both unnecessary, and a waste of money, at least in my industry. I’ve always had PI, as I’m contractually obliged to have it. But in 12 years of working as an actuarial contractor, and 26 years of working in the actuarial profession at large, I have never once heard of even one actuarial contractor needing to claim on their PI, and it’s a small profession. If you can point me to just one instance of an actuarial contractor claiming on their PI, I’m more than happy to revise my opinion on it.

This is the reason why I would prefer to go with the agent's PI cover - it'll save me money. I'm satisfied that I am covered under his policy.

[northernladuk]

Yes, you are correct, and well summarised. I take all your points. However, this is not the question I am asking here. The question I am asking is this: in the event of an investigation by HMRC to determine compliance with IR35 regulation, does the fact that a contractor's ltd company not having its own PI, but is a member of a Group PI scheme instead, mitigate against the ltd company in that investigation?

Overall PI insurance is a very very minor flag. You've got a lot more to worry about than PI if you don't understand IR35 enough to be able to guess this to be honest so forget the IR35 aspect. The idea that having their PI will stop you being investigate is ludicrous though. It might be a very slight help in a defense if you are investigated but it won't mitigate an investigation.

What is more important is that you are still banging on about using an agents PI. It's likely your contract will stipulate you must have PI insurance so you'll be in breach without it. It's a few hundred quid a year. The idea that you are using an agents PI is very risky. You are not in control, you don't know the full T&C's and so on. As Andy aluded to it covers them and not you so if you cock up you could still be exposed.

The very simple answer, which you've been given numerous times, is to get yourself the proper PI cover and forget the agent. It's your business so you need to run it properly. Pay £140 quid or whatever, the IR35 issue is covered and your ass is covered. No risk and no worry.

[mediacity]

You are confusing people.

PI is in your business's name and covers your business not you personally as individual.

As faults can be found in your company's work after your company has finished one contract and started another contract with a different company, you need to ensure your business has continual cover.

Yes, you are correct, and well summarised. I take all your points. However, this is not the question I am asking here. The question I am asking is this: in the event of an investigation by HMRC to determine compliance with IR35 regulation, does the fact that a contractor's ltd company not having its own PI, but is a member of a Group PI scheme instead, mitigate against the ltd company in that investigation?

[Andy Hallett]

Limited company



I don't understand what you mean by this, please state the reasons why this would be shooting myself in the foot.



This is normal for this agent. The agent is placing contractors, and also members of his own permanent staff, into the Company. If there were a claim against work that I did, the company would claim against the agent's PI. He has confirmed that contractors are covered under his group policy.

My question is: if I were ever the subject of an IR35 investigation, would the fact that I don't have my own PI count against me - that I'm being covered under the agent's Group PI scheme instead. If it would count against me, why?

This is not Public Sector.

Their PI insurance will cover their arse, not yours.

[northernladuk]

No way in hell would I be using the agents PI... Even if it was kosher. Which I still doubt.

[SueEllen]

You are confusing people.

PI is in your business's name and covers your business not you personally as individual.

As faults can be found in your company's work after your company has finished one contract and started another contract with a different company, you need to ensure your business has continual cover.

[mediacity]

Aren't you via a LTD? Personal PI? Agent's PI?

Limited company

Surely if you are talking IR35 and being a business personal PI is actually a shooting yourself in the foot?

I don't understand what you mean by this, please state the reasons why this would be shooting myself in the foot.

If you think using an agents PI to cover your business activities is acceptable for IR35 you need to have another read up on it I'd say. I'm not even getting why the agent is willing to cover the risk of you making a cock up. How does that work? This isn't Public Sector or anything is it?

This is normal for this agent. The agent is placing contractors, and also members of his own permanent staff, into the Company. If there were a claim against work that I did, the company would claim against the agent's PI. He has confirmed that contractors are covered under his group policy.

My question is: if I were ever the subject of an IR35 investigation, would the fact that I don't have my own PI count against me - that I'm being covered under the agent's Group PI scheme instead. If it would count against me, why?

This is not Public Sector.

[mediacity]

Are you sure ? What will happen when you take on your next contract if it is not with the same agent ?

Yes, I am sure. At the end of the current contract I would need to take out a personal PI policy again, assuming it was not with the same agent.

[Seahorse17]

Is your agent's policy going to cover previous work, or just the current contract? You need to be covered if a claim arises after the contract is finished.

[kaiser78]

Hi

I have a personal PI policy. I'm just about to take up a six month contract where the recruitment agent has a Group PI policy, under which I will be covered. I had intended to lapse my personal PI policy, in order to save money; however, the recruitment agent said that some accountants advised their clients to maintain a personal PI policy for IR35 reasons. Does anyone have any personal experience of this? I assume that to some degree, it's open to interpretation.

Are you sure ? What will happen when you take on your next contract if it is not with the same agent ?

[northernladuk]

Aren't you via a LTD? Personal PI? Agent's PI?

Surely if you are talking IR35 and being a business personal PI is actually a shooting yourself in the foot?

What does it say in your contract about insurances?

If you think using an agents PI to cover your business activities is acceptable for IR35 you need to have another read up on it I'd say. I'm not even getting why the agent is willing to cover the risk of you making a cock up. How does that work? This isn't Public Sector or anything is it?

[mediacity]

Hi

I have a personal PI policy. I'm just about to take up a six month contract where the recruitment agent has a Group PI policy, under which I will be covered. I had intended to lapse my personal PI policy, in order to save money; however, the recruitment agent said that some accountants advised their clients to maintain a personal PI policy for IR35 reasons. Does anyone have any personal experience of this? I assume that to some degree, it's open to interpretation.