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Cancelling PI Insurance

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    Cancelling PI Insurance

    Hello everyone

    After 10 years working as a contractor via PSC, I would like to cancel Professional Indemnity cover for my limited company. I've learnt that after the cancellation the Insurer wouldn't honor claims relating to periods when my cover was active. Is this the standard practice? Seems unreasonable to me.

    What is your opinion, how long should I keep up the "runoff" payments, given relatively low risk profile? Thank you in advance for your input.
    If UKIP are the answer, then it must have been a very stupid question.

    #2
    Correct. Client may find problems that you could be liable for after you've left. It's standard stuff.

    I'd keep all insurances including tax cover going for a full tax year after closing personally.

    If money was tight I might drop PI and take the risk, which to be fair, is so small its so small its not true.

    But for the price of it I'd pay once more and sleep soundly.

    I wouldn't knock anyone that says just cancel it, no contractor has ever been done for PI.

    Your call.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Also hard to know if the policy is active if the company it is protecting no longer exists. Worth checking if directors are covered if a claim is made against an officer or ex officer of the company?

      Comment


        #4
        Are you keeping your company or closing that too?

        Once the company is closed it will probably be safe to stop the insurance
        Originally posted by Stevie Wonder Boy
        I can't see any way to do it can you please advise?

        I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

        Comment


          #5
          Originally posted by SimonMac View Post
          Are you keeping your company or closing that too?

          Once the company is closed it will probably be safe to stop the insurance
          Doh. Good point. +1
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Originally posted by SimonMac View Post
            Are you keeping your company or closing that too?

            Once the company is closed it will probably be safe to stop the insurance
            I will keep the company active for now, but I might put it dormant if the market does not improve.
            If UKIP are the answer, then it must have been a very stupid question.

            Comment


              #7
              Originally posted by northernladuk View Post
              Doh. Good point. +1
              Agreed.

              although if your have tax cover, the general consensus is to keep that running for one year after closing company.

              However, whats to stop an inquiry happening 2/3 years after, not sure?

              Comment


                #8
                Originally posted by CompoundOverload View Post
                Agreed.

                although if your have tax cover, the general consensus is to keep that running for one year after closing company.

                However, whats to stop an inquiry happening 2/3 years after, not sure?
                This is where the liability has to be raised against an individual and not the company. There's quite a burden of proof IIRC to achieve this. That's why HMRC has veto over closing down companies I am given to understand.

                Comment


                  #9
                  Originally posted by ladymuck View Post
                  This is where the liability has to be raised against an individual and not the company. There's quite a burden of proof IIRC to achieve this. That's why HMRC has veto over closing down companies I am given to understand.
                  Do you know in what circumstance they would prevent the company from closing down, assuming you've paid all your personal tax, VAT and corp tax on time?

                  And if they agree to the company closing down, at what point would they want to re-open to look at anything? And if you've paid all taxes on time would they want to still look at your affairs?

                  Therefore, how long would you ideally need tax insurance running post closure?

                  Comment


                    #10
                    Originally posted by CompoundOverload View Post
                    Do you know in what circumstance they would prevent the company from closing down, assuming you've paid all your personal tax, VAT and corp tax on time?
                    Dunno but I haven't anything about HMRC stopping decent contractor companies that have been run properly from closing so I wouldn't be worried about that personally.
                    And if they agree to the company closing down, at what point would they want to re-open to look at anything? And if you've paid all taxes on time would they want to still look at your affairs?

                    Therefore, how long would you ideally need tax insurance running post closure?
                    One full tax year. i,e. whatever is left this year and renew for 1 year. It's just a rule of thumb and it you are that wary do it for 2. For a few hundred quid it's a very cheap way to sleep at night. If you are one of them that thinks it's a waste of time and will never be needed then you can cancel it when you feel. If you are one of those that are adamant HMRC will never come after a closed company then also stop paying as soon as you want.

                    As neither the last two have been proven I'd be happy to shell out 250 quid more to be sure.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

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