Contract Review & Clause Negotiation

[SueEllen]

I'm confused by the concept of "legal optional". The law is the law, compliance is not "optional". To be absolutely clear, the insurances I mention as not being a legal requirement are:

Employers’ Liability is not required for most of us because the <snip>

It may be a confusion of terminalogy but Employers Liability Insurance is legally compulsory.

The act even has the word "compulsory" in it's name.

The fact that most contractors are legally exempt under that law from having to fulfill that requirement doesn't mean it's not compulsory.

It's just a legal exemption from a compulsory act.

BTW it's a spelling mistake - it should have read "legally optional".

Any agency and direct client who knows their stuff will draft the contract clause in such a way to put the onus on you to comply with the Employers Liability Compulsory Insurance Act.

As I stated before when I asked my insurer for it they refused to provide it as I don't need it, and thought it was a very odd that I asked as if I wasn't in a legally exempt category I would be breaking the law.

The other insurances can be a condition of doing business in a contract but Employers Liability Insurance isn't.

[Wanderer]

You have clearly illustrated just like the agencies you don't understand the difference between those insurances and when a company is legally required to have them.

While one is legal optional, and advised to be had in certain circumstances, the other is legally compulsory. With the one that is legally compulsory there are certain business that are legally exempt from having to have it.

I'm confused by the concept of "legal optional". The law is the law, compliance is not "optional". To be absolutely clear, the insurances I mention as not being a legal requirement are:

Employers’ Liability is not required for most of us because the Employers’ Liability (Compulsory Insurance) Act 1969 provides for an exemption for "companies employing only their owner where that employee also owns 50% or more of the issued share capital in the company.". That won't apply to everyone but it applies to me and most likely a good number of other people here.

I can't see any law that states that Public liability and Professional Indemnity insurance are a legal requirement, can anyone provide a reference?

People may argue that there are merits in having all these insurances or that a client may require them as a condition of doing business and I'm not disputing that. The point I am making is that none of these three are a legal requirement for us contractors.

[SueEllen]

See if they will accept the answer that "MyCo will comply with all the legal requirements for Employer's Liability Insurance and Public Liability Insurance". If they do then you're good to go as you are not legally required to have these insurances.

You have clearly illustrated just like the agencies you don't understand the difference between those insurances and when a company is legally required to have them.

While one is legal optional, and advised to be had in certain circumstances, the other is legally compulsory. With the one that is legally compulsory there are certain business that are legally exempt from having to have it.

[Wanderer]

b. MyCo Ltd shall ensure the provision of ... Employer's Liability Insurance, Public Liability Insurance ...

See if they will accept the answer that "MyCo will comply with all the legal requirements for Employer's Liability Insurance and Public Liability Insurance". If they do then you're good to go as you are not legally required to have these insurances.

If they say that although it's not a legal requirement, they want it as a condition of doing business then you may have no choice. If it's only a couple of hundred quid so some people just buy it rather than going through the ball ache of arguing the point about it with an ignorant agent and/or client.

[SueEllen]

I have Public Liability insurance as I was working for a client in an office where the facilities i.e. toilets, kitchen, reception where shared with other businesses. Companies tend to cover all people who come on their site if they rent out or own the entire building.

The company who provided me with that (the Co-op) refused to give me Employers Liability insurance as the directors of my company are closely related and I'm the only permanent employee.

I always have had professional indemnity insurance as a lot of my work goes on life systems sometimes with minimal testing. There is more than one broker who does the insurance and they tend to use the same insurance companies to insure you with so you can get it slightly cheaper if they are running a promotion.

The law indicates you don't need Employers Liability Insurance in circumstances where all the directors and employees are family as families don't tend to sue themselves.

I use solicitors to check out my contracts - one unofficially if the majority of the contract is good, and the others officially if the contract is a mess.

I suggest you get a solicitor to amend the Employers Liability Clause to state that you will have it if legally required.

[Pacciae]

I'd go to Qdos for your contract check mate.Bauer & Cottrell may do contract checks but AFAIAC they are too far up Hectors ar*e since working for the OTS to keep IR35

[Hex]

Mine's with Randell Dorling via the PCG. They have discounts for PCG members.

QDOS are competitive. Their PL & EL is about £100. Nothing to stop you telling the agency your don't have PL & EL and asking them to pay for it if they want you to take it out! Up until recently EL was mandatory, but this was changed so it isn't mandatory any more for one employee companies. Maybe the agency is still living in the past.

[GillsMan]

I have PL and EL bundled with my PI. There is almost certainly no need but it is sometimes asked for as you have found out.

Bauer and Cottrell are quick with contract reviews. They used to do it same day sometimes if you told them it was urgent.

Hmmm, if it's not too much more expensive, I might take it out anyway then, to save the ballache of negotiating with an agent.

Obviously, though, one of my duties as Managing Director of MyCo Ltd is maximising profits for my shareholders, so if it's an unnecessary expense (which as you say, it almost certainly is) I'd rather ask them to remove it.

If anyone has/would ask an agent to remove it, let me know. Otherwise I'll just swallow it.

Hex - who did you get your bundle through?

[Hex]

I have PL and EL bundled with my PI. There is almost certainly no need but it is sometimes asked for as you have found out.

Bauer and Cottrell are quick with contract reviews. They used to do it same day sometimes if you told them it was urgent.

[GillsMan]

Hi all,

I've secured a new contract with a new client. Having been contracting for a year (four renewals) this will be my second client. Hence, the first time I enter into this with any sort of experience as a contractor.

I'm going to get this IR35 reviewed - looked at QDos (I did a seaerch on the forum and these guys are recommended a fair bit) who turn it around in 5 working days. Does anyone do it quicker out of interest?

Under the Liability section there are two clauses which cause me concern:

a. MyCo Ltd shall be liable for any loss, damage or injury to any party resulting from the negligent act or omission of its officers, employees or representatives during an Assignment.

b. MyCo Ltd shall ensure the provision of ... Employer's Liability Insurance, Public Liability Insurance ...

There's a further clause basically outlining the need for MyCo Ltd to fully indemnify my work, and I've no problem with Professional Indemnity insurance of course. But I'm not overly happy at having to provide Employer's and Public Liability insurance.

What do others think? Obviously I'll pay it if needed, but I'd really rather not, particularly as this rate is slightly less than I'm on at my current ClientCo.

Just after any advice really. Cheers!