Reply to: Ltd Company formation (doing it yourself)

[malvolio]

My last five contracts have involved EDS at some point in the food chain. I keep seeing the same clauses in their contracts that can be interpreted (were one cynical enough and had enough patience to read and understand a 700 page contract) that no fault can ever be placed at their door. They no doubt take the view it's more cost effective to have garbled contracts and cheap lawyers than actually to deliver a quality service.

Once in a while, of course, they get rumbled and thrown out; sadly never by HMG, who they can use as the cash cow...

[mcquiggd]

I wonder how much EDS's PI cost would be per year... probably cheaper for them to give backhanders or settle out of court I would imagine....

[DaveB]

Secondly, I can find no reference anywhere to an IT contractor being sued for a PI claim...

There has been some movement recently in legal circles that suggests that contractors cannot be held soley responcible for IT cock ups in any case. The burden or responcibility rests at least as much with the clents project manager or equivalent for not providing sufficient oversight of the contractors work to avoid the problems.

Not a cast iron defense but it does mean it's not quite so much of a worry.

[malvolio]

I got a deal on PI that adds the other bits "for free" (yeah, right). I think there are a few others out there that will do the same - I know the PCG's preferred supplier does (another reason to join - the saving on typical PI cover is more than your annual membership...). Two things to note - most of these cover multiple risks, so if you are unlucky enough to get sued a the same time as fourteen other people, the total cover may not be as high as you think (£100k is guaranteed, the "up to £1m" is variable) but clients only want the pretence so it's not really a problem 99% of the time. Secondly, I can find no reference anywhere to an IT contractor being sued for a PI claim...

[marty_boy]

Then you wonder why I get shirty with newbies...

Forgive the multisyllabic nature of the response but basically:

• Professional Indemnity insurance - you cock up their systems, they sue you for half a mill, you're covered. Goes hand in hand with;
• Public Liability (someone trips over your laptop's mains cable and sues for distress) and
• Employer's Liability (you trip over your own laptop cable and sue YourCo).

Doesn't anyone do any research any more?

Thanks for the reply - I was slightly confused as you stated that your PI covered you for all three so wasn’t a 100% sure that you where talking about professional indemnity insurance as I was under the impression all three where separate.

Admittedly I have done zero research on PI as I have just realised that it’s another thing I have to do. Like NEO X I have just set up my own company after initially operating via a Brolly (Parasol).

Thanks again

[malvolio]

Then you wonder why I get shirty with newbies...

Forgive the multisyllabic nature of the response but basically:

• Professional Indemnity insurance - you cock up their systems, they sue you for half a mill, you're covered. Goes hand in hand with;
• Public Liability (someone trips over your laptop's mains cable and sues for distress) and
• Employer's Liability (you trip over your own laptop cable and sue YourCo).

Doesn't anyone do any research any more?

[marty_boy]

Quick Question

True - my PI includes all three, so I tend to forget the distinction!

Whats PI ?

[neo_x]

Thanks all who replied.

I will head on over to PCG and see what they have in store for me.

/giddyup

[malvolio]

I wasn't going to say that...

Whatever happened to subtlety and hidden meanings anyway?

[Tex]

And don't forget the spurs and the cowboy hat...

Essential, pardner. Don't want any posse mistakin' yuh fur an Indian.

[malvolio]

True - my PI includes all three, so I tend to forget the distinction!

[boredsenseless]

Get the Guide to Freelancing from www.pcg.org.uk (and seriously consider joining BTW) which will answer most questions. Basically you need the company, VAT registration, bank account and a competent IT-Freelancer-capable accountant (SJD, 1stAccountancy or the like). You would not go far wrong to have anti IR35-investigaion insurance (bundled wth PCG membership or from people like QDOS, but compare them carefully) and possibly PI at between £450 to £800 pa. Ferarri, Rolex, second houses and £3k laptop can wait a few weeks.

And don't forget the spurs and the cowboy hat...

In amongst all of that you also need employers liability insurance and third party public liability insurance. you can't legally trade in the UK without the public one and you can't employee people (including yourself without the employee one)

[malvolio]

Nah, they're too easy a target these days. I must be getting old...

[Bagpuss]

Malvolio, I am impressed, you used to be a bit rude to the newbies!

[malvolio]

Get the Guide to Freelancing from www.pcg.org.uk (and seriously consider joining BTW) which will answer most questions. Basically you need the company, VAT registration, bank account and a competent IT-Freelancer-capable accountant (SJD, 1stAccountancy or the like). You would not go far wrong to have anti IR35-investigaion insurance (bundled wth PCG membership or from people like QDOS, but compare them carefully) and possibly PI at between £450 to £800 pa. Ferarri, Rolex, second houses and £3k laptop can wait a few weeks.

And don't forget the spurs and the cowboy hat...