Professional Indemnity Insurance - necessary or not? Professional Indemnity Insurance - necessary or not?
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  1. #1



    Default Professional Indemnity Insurance - necessary or not?

    The agency that's got me my latest contract 'strongly recommends' that I get Professional Indemnity Insurance (it wasn't an issue with agency or employer at my last contract). I've checked out the price of such and its several hundred quid for £1million of cover.

    How many contractors here have such insurance, and do you believe it is a must have, and if so how much cover is enough i.e. 100k, or 500k, or more? If it's relevant, I'll be doing some UI testing and producing the online help for a financial app.

  2. #2




    If you think that you're a professional and you want people to treat you like a professional, then act like a professional. Get it. Some projects (and agencies) expect you to have PII on joining.

    Others in your field will tell you how much you need.

  3. #3




    I've never met anyone who had it.

    A lot of contractors didn't even have employer's liability...

    Caunce appear to have a reasonable scheme based on your annual turnover but IANAL.

    I investigated PI through a non specialist broker & was quoted about £1000+.

    I also looked at the I.E.E. scheme which seems to be oriented towards people who design power stations & is even more expensive.

  4. #4



    Default PI

    Many of the brolly/composites provide it inclusively

  5. #5



    Default Re: PI

    but say you needed to call on the PI insurance - what are the exclusions? if you were sued wouldn't you be caught by the t&c's which said words to the effect "if you are a 'bad boy' this policy is null & void" a bit like car insurance/drink driving.

  6. #6



    Default PI -anybody ever heard of anybody needing it?

    It was on the ParasolIT site where I got the quote for circa £320 for £1milion of cover.

    From the replies I've seen here it definitely seems to be an optional extra.
    So I suppose the real question is, has anybody heard of any contractor being put in a position where he has to claim on PII?

  7. #7



    Default Re: PI -anybody ever heard of anybody needing it?

    Contractors no, but remember that unfortunate surveyor who worked for an estate agent.

    He surveyed a house, missed some cracks in the walls (as you do).

    Six years later, the estate agent business had folded, so the client came after him & despite the fact that he was employed by the estate agent & not directly by the client, he got stung for £40k.

    Concentrates the mind a bit.

  8. #8

    WWW ITDoctors co uk


    Default Re: PI -anybody ever heard of anybody needing it?

    I don't have Professional Indemnity Insurance.

    The clients and agents on all my contracts to date have not specified it as a requirement. Clearly clients and agents have their own insurance cover and they are confident that they will never need to recover substantial sums of money from me or my company.

    PII was also supposed to be a factor in deciding IR35 status but from the court cases so far it does not seem to have any real influence over the outcome and why should it? I think a number of companies have made some money out of selling it though and at least one has disappeared leaving contractors without their insurance.

    What business worth it's salt pays several hundred pounds on an insurance that clearly is not required in most cases?

    Obviously I would take out the insurance if it were a mandatory requirement for a new contract but luckily in my case that hasn't happened so far.


    The Accountant

  9. #9



    Default Accountant with no PI

    An accountant with no PI! Now that is an eye opener. Isn't it compulsory to have this in the accounting profession regardless of what individual contracts from agencies state?.

  10. #10

    WWW ITDoctors co uk


    Default Re: Accountant with no PI

    Apologies - I didn't explaim myself properly

    I am an IT contractor - 'The Accountant' is a pseudonym.

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