Reply to: Continuous Insurance Cover. Or not.

[Qdos Contractor]

All product lines?

If I were you, I'd start shouting about how your TLC35 product has paid out to tryto drum up some more business for your new owners!

We've still haven't lost an insured IR35 case, so the liabilities portion of the TLC35 product has not been claimed on. Obviously the defence costs in tax cases are regularly covered.

With PI and PL, insurers have paid out on both the legal costs and damages.

[man]

I have run out of time for researching this now. There are many sites, all operated by companies selling insurance, stating the "claims made" nature of their PI products, ie. that you need to have live cover when a claim is made, as well as cover for the period of the incident to which it relates, or that the incident must be within the "retroactive" period of the policy, if you are to be covered and your insurance claim honoured.

What this means, according to the insurers, is that you must keep PI insurance running after you leave a contract, or change to permanent work, or retire. If a previous client makes a claim, even years later, the policy must still be active. This might mean keeping PI going for years or decades after you leave a client - an expensive business for some.

Personally I suspect that this might not be true. I suspect that having cover at the time of the incident might be sufficient if it came to the crunch, legally. I have not found any case history to confirm either way (which would be a real confirmation). However I am not lawyer or insurance expert so this is just an educated hunch. Certainly it seems like insurer Heaven: a policy that must be renewed forever.

Regarding your point on permanent work / retirement: I don't believe you'd need to keep the policy going for too long as your limited company is liable for the work so when you wind it up... there goes the legal entity that the client can chase. In fact, if I remember Cowboy Builders / Rogue Traders etc they explained that's how lots of cowboy builders manage to keep ripping people off year after year?

I think there is a place in the market for cover to be provided on a basis we're all more accustomed to in our personal lives (i.e. based only on whether the policy was in force at the time of the alleged incident), but I think Hiscox (as an example) are already able to provide cover for future claims as an optional extra so perhaps there isn't considered to be sufficient room to make a profit on an insurance service that covers this as standard. And QDOS, as seen above, cover the other end (claims that come about during your policy with them, irrespective of whether you were previously covered with them at the time of the alleged incident). It is always worth remembering how price conscious people can be over insurance policies so including too much as standard might not be a profitable model - although it would perhaps be a better world...

[DeludedKitten]

We can confirm categorically that the assertion our policies are yet to pay out is wholly inaccurate, we have had numerous accepted claims across all policy lines and are constantly in discussion regarding ongoing claims.

All product lines?

If I were you, I'd start shouting about how your TLC35 product has paid out to tryto drum up some more business for your new owners!

[Qdos Contractor]

We can confirm categorically that the assertion our policies are yet to pay out is wholly inaccurate, we have had numerous accepted claims across all policy lines and are constantly in discussion regarding ongoing claims.

It is the case that the Professional Indemnity Insurance needs to be in place at the time a claim is made, the policy covers the risk of negligence proceedings being brought against the insured whilst on cover and isn't insuring the work undertaken during the period of insurance.

We recommend keeping cover in place as a result of the coverage provided by the policy, which is the standard basis of operation across the Professional Indemnity Insurance market, and is not a sales mechanism. This can be seen by our recommendations around Public Liability Insurance, as the policy reacts to claims ‘occurring’ during the period of insurance regardless of if the policy is in place, if an insured is no longer working we advise that they can lapse the policy.

It is important to remember that the policy wording (the terms and conditions) is the contract of insurance between insured and insurer, so they can be relied upon to confirm the position legally. Within the insuring clauses of Professional Indemnity Insurance it clarifies coverage as being provided for ‘claims first made against the Insured during the Period of insurance’. This confirms that the insurer's liability to pay only exists if the policy is in place when negligence proceedings are brought against the insured.

[northernladuk]

These policies are yet to pay out either for current contracts or previous aren't they?

Interesting question for QDOS but I'd imagine they won't be too eager to answer if they haven't!

[northernladuk]

I can't help it. I'm back.

I have run out of time for researching this now. There are many sites, all operated by companies selling insurance, stating the "per claim" nature of their PI products, ie. that you need to have live cover when a claim is made, as well as cover for the period of the incident to which it relates, or that the incident must be within the "retroactive" period of the policy, if you are to be covered and your insurance claim honoured.

As I linked in Post 5 and even your own insures in Post 6

What this means, according to the insurers, is that you must keep PI insurance running after you leave a contract, or change to permanent work, or retire. If a previous client makes a claim, even years later, the policy must still be active. This might mean keeping PI going for years or decades after you leave a client - an expensive business for some.

As explained in the quotations posted in the same replies. As most people follow the advice given and keep PI going through their contracting time it's no extra cost. At last an interesting question does arise here though. How long should you keep it going? I can't find an answer for us. Some people, like solicitors have to keep it for many years. It's about risk, and as you've said it's pretty low and will go down exponentially past agreed warranty periods. They signed it off.

Personally I suspect that this might not be true. I suspect that having cover at the time of the incident might be sufficient if it came to the crunch, legally.

Absolute rubbish. I'm speechless. How on earth can you say this after you've been spoon fed the links and done the research yourself? Interestingly I found a post for QDOS themselves which would have put this entire debacle to bed in one post. It's below and it states..

Professional Indemnity is arranged on a 'claims made' basis - i.e. you must have it in place at the time of the claim - this is industry standard for this policy

https://forums.contractoruk.com/acco...ml#post2320352

How the **** can you suspect it isn't true when it's been stated over and over again?

I have not found any case history to confirm either way (which would be a real confirmation).

I'm not too sure the details of someone's cover will be detailed in the case history. They detail with the law of the case. How it's paid for and settled isn't part of case history.

However I am not lawyer or insurance expert so this is just an educated hunch

Which bit is educated?

Certainly it seems like insurer Heaven: a policy that must be renewed forever.

But it doesn't need to be renewed forever.

[PerfectStorm]

These policies are yet to pay out either for current contracts or previous aren't they?

[unixman]

I have run out of time for researching this now. There are many sites, all operated by companies selling insurance, stating the "claims made" nature of their PI products, ie. that you need to have live cover when a claim is made, as well as cover for the period of the incident to which it relates, or that the incident must be within the "retroactive" period of the policy, if you are to be covered and your insurance claim honoured.

What this means, according to the insurers, is that you must keep PI insurance running after you leave a contract, or change to permanent work, or retire. If a previous client makes a claim, even years later, the policy must still be active. This might mean keeping PI going for years or decades after you leave a client - an expensive business for some.

Personally I suspect that this might not be true. I suspect that having cover at the time of the incident might be sufficient if it came to the crunch, legally. I have not found any case history to confirm either way (which would be a real confirmation). However I am not lawyer or insurance expert so this is just an educated hunch. Certainly it seems like insurer Heaven: a policy that must be renewed forever.

[northernladuk]

@NLUK I'm ignoring you in this thread for the reasons above. You have wasted my time and your clients (if you are working today).

I do apologize for spending time providing you links and highlighting key paragraphs from those links for you to read, and in so doing, waste your time in your pursuit for a spoon fed one liner answer that you want to hear.

I'll duck out now.

[unixman]

@NLUK I'm ignoring you in this thread for the reasons above. You have wasted my time and your clients (if you are working today).

[northernladuk]

Incidentally this thread/question applies only to professional indemnity insurance.

I don't think it applies to employer's liability, tax inquiry, IR35 etc.

That is your problem right there.

What do you mean it doesn't apply to those? The gaps or the common thinking to keep it going?

[unixman]

Incidentally this thread/question applies only to professional indemnity insurance.

I don't think it applies to employer's liability, tax inquiry, IR35 etc.

[unixman]

Maybe ask YOUR insurer about YOUR policy whether it’s covered.

Why is this so hard?

Yes I take your point. The insurer created the product so he should know how it works. However, his motivation is to get your renewal, and so he might not give you an accurate or complete picture of how the product works. I don't think they would fib, but they are salesmen. Sorry for the cynicism.

[northernladuk]

@NLUK The second post was from DeludedKitten who post a question and has so far not responded to my reply.

@NLUK You're a waste of space the way you talk to people on here, even in "professional" forums. You have hijacked the thread in order to police the posts of others, and have no genuine interest in the matter at hand. Get off the thread and go back to work.

Genuine interest? I posted a number of links and quotes that answer your question with no room for doubt. I don't see anyone else has put any effort in to help you. And just to prove that you go on to say...

Just looking at my current documents from QDOS, there must be 50 pages of stuff there. TBH I am not capable of interpreting that lot, and anyway I think it would say continuous cover is needed. QDOS would probably say the same over the phone, for obvious reasons. I don't really believe it. If it were true, there would be quotable cases, and quite likely insurance agents on this thread quoting them.

What do you mean you think? I quoted you the exact wording from the QDOS site. It tells you exactly what the situation of the cover is. They cannot, however, tell you how to run your business. It's very clear that if you got caught out inbetween insurance cover you would NOT be covered. It's not up to them to make the decision for you as to whether it's risky or not.

All that said the very last line of the statement from the QDOS site answers your question? I'll quote it again for you.

How the policy operates

Professional Indemnity Insurance operates on a ‘claims made’ basis. This means that the policy needs to be in force at the time a claim is made, for example when negligence proceedings are brought against the insured. If the policy is cancelled or allowed to expire and a claim is then brought, the policy will not react, irrespective of if the claim relates to services provided when the insured was on cover. The policyholder should consider keeping the policy in force continually until they are no longer exposed to claims.

If you don't want to follow good practice and advice then that's your call. Don't have a pop at me about it.

Time's running out for my renewal, so I will probably renew. If the question could be clarified though, it could save contractors a lot of money. The implication is that contractors must keep every insurance policy going for the rest of their lives (at the extreme) and that adds up to a lot of cash, depending on your age.

It would save a lot of money but the insurance companies wouldn't make enough to cover the costs so surely if this became common practice premiums would, penalty clauses and admin fees would be introduced to cover it.

Do you really want to be the one case we quote when you get caught with no insurance for the money you are going to save? That's your call, not ours. We can only give you the facts, which I believe we've done.

[MrButton]

That is the question in a nut shell. Would the fact that I was covered when the incident took place not cover it ?

Maybe ask YOUR insurer about YOUR policy whether it’s covered.

Why is this so hard?