Regulations for Ltd's Do we need a legal insurance by law ? Regulations for Ltd's Do we need a legal insurance by law ?
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  1. #1

    Nervous Newbie


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    Wink Regulations for Ltd's Do we need a legal insurance by law ?

    As a ltd company director the ltd is responsible for any legal action and not the individual so is there a legal requirement for cover in the event of whatever resulting in litigation. I'm aware this is rare and more likely for IR35 scenarios, when in this case they take the individual to court for tax avoidance so is not strictly the same.

    Is it a legal requirement ? I'm considering umbrella for this reason. If it is a requirement how much is it typically and can anyone recommend a good policy that covers normal stuff ?

  2. #2

    Fingers like lightning

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    Generally there are three types of insurance that you need to consider.

    Employer Liability Insurance - this covers the employer against claims by an employee for injury etc. This cover is no longer required if you are the only employee and you own at least 50% of the shares.

    Public Liability Insurance - to insure you against claims from third parties that may sue if they have suffered because of your actions. This is a legal requirement.

    Professional Indemnity Insurance - to insure you against claims from third parties that may sue, eg for defective work. This is not a legal requirement.

    There are of course many other types of insurance, such a jury cover, IR35 cover, medical etc. but none of them are a legal requirement unless of course you have a company provided car/van!

    Alan

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    Strictly speaking I believe a director or employee of a company can be pursued personally for negligence. Not that it generally happens.
    bloggoth

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    Quote Originally Posted by Nixon Williams View Post
    Public Liability Insurance - to insure you against claims from third parties that may sue if they have suffered because of your actions. This is a legal requirement.
    Since when? If you don't have visitors to your place of work and rarely work onsite, unless it is stipulated in a contract there is little point in getting PLI.

    The only insurance required legally is ELI and only if you employ somebody.

  5. #5

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    Quote Originally Posted by xoggoth View Post
    Strictly speaking I believe a director or employee of a company can be pursued personally for negligence. Not that it generally happens.
    Have you got a reference for that?

    I've heard that with a Limited Company, the only time you could be pursued is if the director committed fraud and even then it would only happen if criminal charges were brought against the director (which is unlikely for folks like us).

  6. #6

    Fingers like lightning

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    Quote Originally Posted by Nixon Williams View Post
    Public Liability Insurance - to insure you against claims from third parties that may sue if they have suffered because of your actions. This is a legal requirement.
    Alan
    Are you sure? Only the first few sites in a Google search seem to suggest its not. I'm fully aware that the sites may be wrong, which is why I thought I'd clarify with you, as I don't have PLI on the basis that I thought it was not a legal requirement - so if I'm wrong I'll have to sort that out ASAP.

    Public Liability Insurance legal requirement - Google Search

  7. #7

    I live on CUK

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    Quote Originally Posted by Nixon Williams View Post
    Public Liability Insurance - to insure you against claims from third parties that may sue if they have suffered because of your actions. This is a legal requirement.
    Is public liability a legal requirement?

    Public Liability is not a legal requirement but it is good business practice. Local authorities will generally demand a minimum level of £2m for works to be undertaken at their premises or on their behalf.

    From a company that actually sells insurance products - Public liability and employers liability help and questions - insuredrisks.co.uk.


    Admin note: professional indemnity insurance and public liability insurance available here :-)


    And the PCG states simply -

    These insurances are advisable for most businesses.
    And lists public liability under them.


    I'm aware for most contractors who have a car/van and use it to commute to different client sites/offices the only insurance they actually legally need is their car/van insurance to cover them for business use.



    Admin note: professional indemnity insurance and public liability insurance available here :-)
    Last edited by Contractor UK; 13th October 2011 at 14:40.

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