New insurance policy - will it unblock outside IR35 PSC gigs?

[inniAccounts]

Just come from a session with an insurer. They've got a new product to insure those working outside IR35 via PSC, across the entire supply chain. i.e. the policy can be purchased by anyone - contractors, agents, or end clients - and everyone in the supply chain is covered. They're trying to position agents to do the status determinations for clients (via their IR35 partner), and back the decision with insurance.

They'll only (obvs) insure you if you have an outside IR35 determination (doesn't have to be via CEST). If your determination is done by one of their approved partners (there's many) the policy gets even juicer.

Sounds like they could remove the risk of outside IR35 contractors out of the supply chain and could unblock blanket anti-PSC policies.

Thoughts?

[jamesbrown]

My thoughts are that the risks can't really be insured away from the perspective of a big corporate and they'd rather eliminate the risk than attempt some sort of half-arsed mitigation.

Also, what's the incentive for a contractor to purchase? The liability isn't with them.

Perhaps it will provide a comfort blanket at the margins for smaller companies that are medium-sized w/r to the Companies Act, but evidence so far is that big corporates prefer to eliminate the risk, not mitigate it.

In summary: meh.

[GhostofTarbera]

My thoughts are that the risks can't really be insured away from the perspective of a big corporate and they'd rather eliminate the risk than attempt some sort of half-arsed mitigation.

Also, what's the incentive for a contractor to purchase? The liability isn't with them.

Perhaps it will provide a comfort blanket at the margins for smaller companies that are medium-sized w/r to the Companies Act, but evidence so far is that big corporates prefer to eliminate the risk, not mitigate it.

In summary: meh.

Agreed, big Corp won’t buy or risk it

Meh indeed


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[inniAccounts]

If you're working outside IR35, it's likely indemnity clauses from client to agent to you will put you on the hook, moreso in the new world.

Yes, agree clients unlikely to buy, as in purchase, it. But the pivot here is an agent who can supply resource that's adequately assessed (passing duty of care) and protected (via insurance). Agent works hard to assess on clients' behalf, buys insurance policies, advertises outside IR35 PSC roles, get pick of contractors, becomes a competitive advantage. Compliant, insurance-backed, with access to best contractors.

[wattaj]

If you're working outside IR35, it's likely indemnity clauses from client to agent to you will put you on the hook, moreso in the new world.

Yes, agree clients unlikely to buy, as in purchase, it. But the pivot here is an agent who can supply resource that's adequately assessed (passing duty of care) and protected (via insurance). Agent works hard to assess on clients' behalf, buys insurance policies, advertises outside IR35 PSC roles, get pick of contractors, becomes a competitive advantage. Compliant, insurance-backed, with access to best contractors.

I feel that you are deluding yourself.

[Lance]

Just come from a session with an insurer. They've got a new product to insure those working outside IR35 via PSC, across the entire supply chain. i.e. the policy can be purchased by anyone - contractors, agents, or end clients - and everyone in the supply chain is covered. They're trying to position agents to do the status determinations for clients (via their IR35 partner), and back the decision with insurance.

They'll only (obvs) insure you if you have an outside IR35 determination (doesn't have to be via CEST). If your determination is done by one of their approved partners (there's many) the policy gets even juicer.

Sounds like they could remove the risk of outside IR35 contractors out of the supply chain and could unblock blanket anti-PSC policies.

Thoughts?

can we see the policy wording?

[eek]

Why would I as a contractor buy it.

I can see an agency purchasing it - it helps justify their fees (probably even allows them to increase it) and provides some confidence for the end client but who would trust the contractor to keep it in place.

[jamesbrown]

If you're working outside IR35, it's likely indemnity clauses from client to agent to you will put you on the hook, moreso in the new world.

Highly questionable whether such clauses would stick and, in any case, the liability to tax exists first. Transfer of liability could take forever and probably won’t work, so the risk is there. You can’t insure against the work needed to conduct an IR35 review, justify a review, defend a review. You cannot insure against reputational damage. You cannot insure against financial services regulations surrounding risk management. You cannot insure against the risks of tin-pot insurance.

Pie in the sky. I admire your optimism, but accountants are going to get hit hard, so it’s perhaps better to worry about that.

[inniAccounts]

Highly questionable whether such clauses would stick and, in any case, the liability to tax exists first. Transfer of liability could take forever and probably won’t work, so the risk is there. You can’t insure against the work needed to conduct an IR35 review, justify a review, defend a review. You cannot insure against reputational damage. You cannot insure against financial services regulations surrounding risk management. You cannot insure against the risks of tin-pot insurance.

Pie in the sky. I admire your optimism, but accountants are going to get hit hard, so it’s perhaps better to worry about that.

Help me understand how this is different to PI and the situation contractors are in today? Does shonky work by a contractor not represent a reputational risk? Does it not represent a risk to regulatory compliance? Is it not managed via indemnity clauses to transfers liability to contractors? Is it not covered by 'tin-pot' PI insurance that is mostly mandated on contractors?

[GhostofTarbera]

Help me understand how this is different to PI and the situation contractors are in today? Does shonky work by a contractor not represent a reputational risk? Does it not represent a risk to regulatory compliance? Is it not managed via indemnity clauses to transfers liability to contractors? Is it not covered by 'tin-pot' PI insurance that is mostly mandated on contractors?

We might have heard of 1 or 2 claims (rumors not any details) of PI claims in 20 years on these boards and other boards - it’s just not a thing in PSC land as 95% of clients just see you as an employee anyway


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