IT Agency Contract - Professional Imdemnity

[paulwoodward]

Hi all,

First time contracting through an agency so not sure if this is normal practice.

My reading of liability clauses below makes me think they want my limited company to take on unlimited liability. Surely they can't be serious?

Thanks, Paul

The Company agrees that it shall be liable for any loss, expenses or damages resulting from the
negligence, dishonesty, misconduct or lack of skill of the Consultant(s) or Other Personnel or of any acts
or omissions of the Consultant(s) or Other Personnel pursuant to this Agreement which may result in
liability by «Division» to the Client, End User or to any third party.

The Company shall agree to maintain and meet the cost of, throughout the term of this Agreement, a
policy of professional indemnity insurance for an amount of not less than One Million Pounds Sterling
(£1,000,000) or as otherwise stated in Schedule 2, to cover its liability as set out in Clause 10 above and
to provide to «Division» , if so requested, a copy of such insurance policies.

[cojak]

Hi all,

First time contracting through an agency so not sure if this is normal practice.

My reading of liability clauses below makes me think they want my limited company to take on unlimited liability. Surely they can't be serious?

Thanks, Paul

Reread the contract, it's not unlimited. This is normal insurance for a Ltd. Take a look at QDOS insurance.

Actually, why aren't you getting your contract reviewed by QDOS or Bauer & Cottrell?

[SueEllen]

Regardless of whether you are contracting directly or through a agency you should have professional indemnity insurance and with some clients other insurances like public liability insurance.

There are some liabilities that are limited by the amounts in the contract but others which unfortuntely your company will have unlimited liability for as they can't be limited in law i.e. fraud, death.

[paulwoodward]

Reread the contract, it's not unlimited. This is normal insurance for a Ltd. Take a look at QDOS insurance.

Actually, why aren't you getting your contract reviewed by QDOS or Bauer & Cottrell?

I have no qualms with the insurance - I have it. My reading of above clause, however, is that although PI insurance is required (minimum £1m), the level of liability implied by the contract is unlimited.

I'm definitely planning to get contract reviewed, however this seemed so obvious (to me) it could be sorted out prior to review to save multiple iterations.

[SueEllen]

I have no qualms with the insurance - I have it. My reading of above clause, however, is that although PI insurance is required (minimum £1m), the level of liability implied by the contract is unlimited.

I'm definitely planning to get contract reviewed, however this seemed so obvious (to me) it could be sorted out prior to review to save multiple iterations.

Get the contract reviewed and point out the wording to the reviewer with your concerns.

As stated in my previous post while certain liabilities are can be limited other liabilities like fraud are not due to the law.

[paulwoodward]

Sounds like a plan, thanks.

[MPwannadecentincome]

Actually, why aren't you getting your contract reviewed by QDOS or Bauer & Cottrell?

When I asked them to review my contract they told me they would only do IR35 reviews not "commercial" reviews. Terms discussed by OP are commerical not IR35 so those companies might not be able to help - I was told to go to a commercial lawyer for my queries.

[jamesbrown]

When I asked them to review my contract they told me they would only do IR35 reviews not "commercial" reviews. Terms discussed by OP are commerical not IR35 so those companies might not be able to help - I was told to go to a commercial lawyer for my queries.

Some firms can formally review for commercial and IR35 together (e.g. Lawspeed) and some IR35-focused reviews also include more general pointers, but separate reviews are indeed required in most cases. Some examples:

Legal and IR35 Advisory services :: Contractor UK

[Andy Hallett]

Sorry to point this out Cojak, but the liability is uncapped in the first paragraph.

The second paragraph states how much insurance the company must maintain.

[cojak]

You're quite right Andy

All I can say then is to ask the agency to remove it or get B&C to ask them.