Recruitment Agencies Plugging IR35 Insurance

[ladymuck]

So why are you paying it if the agency is the company that benefits?

It's a bit like mortgage indemnity insurance - paid for by you, paid to the lender if you default.

Not a direct equivalent, of course, but the principle of being asked/required to take out insurance that you don't benefit from is not a new ruse.

[CheeseSlice]

So why are you paying it if the agency is the company that benefits?

Yeah arguably it should have been the agent paying as a cost of providing the service, but at the time it was an avenue to get an outside IR35 contract during a time when a lot of agents and clients were struggling to get to grips with the new process.

[jamesbrown]

I will wait for jamesbrown to arrive and point out all the risks there but I wouldn't be accepting such a clause and I would be questioning if it's legal....

Aye, avoid them like the plague. There's mixed opinion about whether they would stand up (even well-drafted ones), but there's a risk they might.

[eek]

I've had a contract where the insurance is mandatory, but was arranged via the agent as part of the SDS tool. The product intention is to directly protect the client and/or agency. I had to pay for the SDS check/insurance and if the contract ran on for more than 6 months (which it didn't) I had to pay again to ensure the status was checked again. Seemed like a sensible and fair compromise to me.

So why are you paying it if the agency is the company that benefits?

[CheeseSlice]

I've had a contract where the insurance is mandatory, but was arranged via the agent as part of the SDS tool. The product intention is to directly protect the client and/or agency. I had to pay for the SDS check/insurance and if the contract ran on for more than 6 months (which it didn't) I had to pay again to ensure the status was checked again. Seemed like a sensible and fair compromise to me.

[eek]

There's basically a clause written in my contract stating the contractor indemnifying the agency and client on demand from and against any costs, liabilities or expenses arising from HMRC challenging the client's status determination. No mention of a substitution clause either...

I will wait for jamesbrown to arrive and point out all the risks there but I wouldn't be accepting such a clause and I would be questioning if it's legal....

[Tractor Trace]

There's basically a clause written in my contract stating the contractor indemnifying the agency and client on demand from and against any costs, liabilities or expenses arising from HMRC challenging the client's status determination. No mention of a substitution clause either...

[eek]

No, but I’m not surprised. And I’ll bet that it won’t be worth the paper it’s written on.

Ask for the insurance details and post them on here, give us all a laugh…

Well the insurance the OP needs is one that provides legal advice and support if a clawback clause was triggered by the agency (and I don't think one exists for multiple reasons)..

And I really don't think it's practical for them to profit from a selling a product that would only be used to sue them while protecting yourself.

Now I could just about understand being asked to pay for an IR35 review to confirm the contract is outside on your side but beyond that I'm at a loss as to what is actually being insured and is insurable...

[cojak]

No, but I’m not surprised. And I’ll bet that it won’t be worth the paper it’s written on.

Ask for the insurance details and post them on here, give us all a laugh…

[Tractor Trace]

Has anyone experienced recruitment consultants trying to push for IR35 insurance on a contract? Without naming any names I have been offered an Outside IR35 contract with an end client who is a medium- large sized company so technically I would not carry the liability.

However, agent keeps asking whether I have "Outside IR35 insurance", stating that it is required and that they have a list of approved insurers to register with prior to processing a contract. They also keep dragging their heels with "building the contract" which is a novel way of explaining that it gets drafted and sent through. I have never come across this before.