Reply to: IT Agency Contract - Professional Imdemnity

[aoxomoxoa]

You do know that equitable and equal aren't the same word, don't you?

Are you suggesting that you don't want a fair and impartial (equitable) contract with respect to IR35 issues?

It's a fair cop guv, I should've read the post more carefully.

[Taita]

You do know that equitable and equal aren't the same word, don't you?

Are you suggesting that you don't want a fair and impartial (equitable) contract with respect to IR35 issues?

Thank you DirtyDog.

[DirtyDog]

Except when it comes to certain IR35 related matters such as notice periods.

You do know that equitable and equal aren't the same word, don't you?

Are you suggesting that you don't want a fair and impartial (equitable) contract with respect to IR35 issues?

[Wanderer]

they want my limited company to take on unlimited liability. Surely they can't be serious?

It doesn't really matter because your financial liability is limited to the value of shares in the company that you own and typically this is < £100. If anything goes wrong you can just fold the company and they can't touch you....

[aoxomoxoa]

A good contract is an equitable one.

Except when it comes to certain IR35 related matters such as notice periods.

[Taita]

You're quite right Andy

All I can say then is to ask the agency to remove it or get B&C to ask them.

It is commercially unreasonable to hold a party liable beyond the limits of the asked for insurance. PI may not cover everything the agency requires but they could ask for additional insurance to cover other perceived risks.

A good contract is an equitable one.

In practice, if the contractor's company has inadequate cover in the event of solid grounds for a claim there is little further for the claimant to go. The contractor's company folds and life goes on. It would have to be an actual crime or an especially unusual set of circumstances to give rise to a further claim against the contractor as a director of his company.

[cojak]

You're quite right Andy

All I can say then is to ask the agency to remove it or get B&C to ask them.

[Andy Hallett]

Sorry to point this out Cojak, but the liability is uncapped in the first paragraph.

The second paragraph states how much insurance the company must maintain.

[jamesbrown]

When I asked them to review my contract they told me they would only do IR35 reviews not "commercial" reviews. Terms discussed by OP are commerical not IR35 so those companies might not be able to help - I was told to go to a commercial lawyer for my queries.

Some firms can formally review for commercial and IR35 together (e.g. Lawspeed) and some IR35-focused reviews also include more general pointers, but separate reviews are indeed required in most cases. Some examples:

Legal and IR35 Advisory services :: Contractor UK

[MPwannadecentincome]

Actually, why aren't you getting your contract reviewed by QDOS or Bauer & Cottrell?

When I asked them to review my contract they told me they would only do IR35 reviews not "commercial" reviews. Terms discussed by OP are commerical not IR35 so those companies might not be able to help - I was told to go to a commercial lawyer for my queries.

[paulwoodward]

Sounds like a plan, thanks.

[SueEllen]

I have no qualms with the insurance - I have it. My reading of above clause, however, is that although PI insurance is required (minimum £1m), the level of liability implied by the contract is unlimited.

I'm definitely planning to get contract reviewed, however this seemed so obvious (to me) it could be sorted out prior to review to save multiple iterations.

Get the contract reviewed and point out the wording to the reviewer with your concerns.

As stated in my previous post while certain liabilities are can be limited other liabilities like fraud are not due to the law.

[paulwoodward]

Reread the contract, it's not unlimited. This is normal insurance for a Ltd. Take a look at QDOS insurance.

Actually, why aren't you getting your contract reviewed by QDOS or Bauer & Cottrell?

I have no qualms with the insurance - I have it. My reading of above clause, however, is that although PI insurance is required (minimum £1m), the level of liability implied by the contract is unlimited.

I'm definitely planning to get contract reviewed, however this seemed so obvious (to me) it could be sorted out prior to review to save multiple iterations.

[SueEllen]

Regardless of whether you are contracting directly or through a agency you should have professional indemnity insurance and with some clients other insurances like public liability insurance.

There are some liabilities that are limited by the amounts in the contract but others which unfortuntely your company will have unlimited liability for as they can't be limited in law i.e. fraud, death.

[cojak]

Hi all,

First time contracting through an agency so not sure if this is normal practice.

My reading of liability clauses below makes me think they want my limited company to take on unlimited liability. Surely they can't be serious?

Thanks, Paul

Reread the contract, it's not unlimited. This is normal insurance for a Ltd. Take a look at QDOS insurance.

Actually, why aren't you getting your contract reviewed by QDOS or Bauer & Cottrell?