Professional Indemnity Insurance

**Lucifer Box** · 31 August 2005, 16:49

Originally posted by rootsnall

I know this was covered recently but I didn't need it at the time. A possible contract needs £1,000,000 Professional Indemnity Insurance in place, whats the cheapest !?

Also has anybody any experiences of Alexander Mann ? Lots of upfront requirements so far.

As I recall, Caunce O' Hara were broking a £1m professional indemnity policy for contractors for a premium of about £550 pa.

**boredsenseless** · 1 September 2005, 07:50

You need to check the wording of the PI requirement and then ask someone like C O'Hara if they can provide that sort of cover.

Once of the issues I got caught with was the fact that the 1 million limit was cumulative, and therefore if you have two clients at the same time they are not both covered if something goes wrong on both accounts. Not likely I know but try explaining that one to your customers risk and compliance manager.

Most contracts if they state the need for PI will say something like £1 million pounds for each and every claim. WHich therefore means your liability will be much higher.

Check the contract, ask someone like Caunce O'Hara - they seem to be the cheapest and if they can't help you go to one of the biggies like Norwich Union and speak to one of the Company Insurance advisors.

Cumulative insurance isn't cheap but it definelty isn't worth scrimping on, as if you say you've got it and haven't the client can claim back everything they've paid you as you have broken the agreement.

If you are with a brolly however its their lookout if they agree to take on the contract to cover you for that amount.

**rootsnall** · 1 September 2005, 08:30

WIll the brollys generally handle this then as part of their standard package !?

The agent mentioned they could sort it out for £11 a day. Things are certainly getting more complicated for us poor contractors ! Its also my first job hunt since the agency regs and as I suspected there's not much choice but to opt out if the agent is on the ball, if I don't I'll be at the back of the queue ! They also want refs for my last 2 years work and a copy of my passport !!! I don't think any of this is the doing of the agent but the end client.

**Chico** · 1 September 2005, 17:53

Sounds like Alexander Mann/ Vodafone contract. I think it is £11 a week not a day and it is for the duration of the contract so not transferable if you get another contract independent of AlexMann. You can get PI insurance independently and that way its not tied to a particular contract or client.

**tim123** · 2 September 2005, 07:22

Originally posted by boredsenseless

Cumulative insurance isn't cheap but it definelty isn't worth scrimping on, as if you say you've got it and haven't the client can claim back everything they've paid you as you have broken the agreement.

Utter rubbish. This will be a simple breach of contract, and the remedy for a breach is always limited in quantum to actual loss. And if you've got to the end of the contract and not had to use the insurance that you said that you had, but don't actually have, the clients loss will be zero.

Of course they can use this as a reason to terminate early, but most clients think that they can do this for no reason anyway.

tim

**tim123** · 2 September 2005, 07:25

Originally posted by rootsnall

Its also my first job hunt since the agency regs and as I suspected there's not much choice but to opt out if the agent is on the ball, if I don't I'll be at the back of the queue ! They also want refs for my last 2 years work and a copy of my passport !!! I don't think any of this is the doing of the agent but the end client.

These two items are linked. They want the details from you because the requlations require that they confirm your suitability for the job if you are opted in. If you opt out they don't need the 'professional' details, though they still need the personal details to comply with money laundering regs.

tim

**boredsenseless** · 2 September 2005, 07:44

I hate to point out the obvious but Professional Indemnity Insurance always includes a run-off period that indemnifies the end client for a period of time after the delivered work this can be up to six years depending on your contract.

So if you haven't got it right just pray nothing goes wrong

**rootsnall** · 2 September 2005, 08:31

Is the Professional Indemnity Insurance for you as an individual or for your Ltd Co ? Has an uninsured one man Ltd ever been held liable for anything, they could try but they'd be wasting their time and money I would of thought, almost impossible to prove something was your fault if you are a code monkey. If they chased you as an individual then maybe that would be worth worrying about but surely that goes against the whole point of providing goods or services via a limited liability company.

Any road up I'll have to pay it if it means contract or no contract, £11 a week sounds OK, I'll go Pay As You Go.

**tim123** · 2 September 2005, 09:06

Originally posted by rootsnall

Is the Professional Indemnity Insurance for you as an individual or for your Ltd Co ?

It is for the individual. (S)he is the one who has the professional knowledge and experience that the client is buying.

Originally posted by rootsnall

I would of thought, almost impossible to prove something was your fault if you are a code monkey.

This is true, but how many contracts are there available for code monkeys? If you aren't offering more than this you job is being offshored

Originally posted by rootsnall

If they chased you as an individual then maybe that would be worth worrying about but surely that goes against the whole point of providing goods or services via a limited liability company.

No, A limited company protects you from the consequences of making a wrong business decision. It does not protect you from making a wrong professional decision.

tim

Professional Indemnity Insurance