Do I really need Professional Indemnity isurance? Do I really need Professional Indemnity isurance?
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  1. #1

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    Default Do I really need Professional Indemnity isurance?

    Hi all,
    This is my first post as a newbie contractor. Have set up Ltd company, got an accountant & bank a/c, registered for VAT & PAYE etc. I am now looking at insurance and see that the only compulsory insurance is Employers Liability (and even that is only compulsory whilst IR35 is still around).

    Is Professional Indemnity worth it? I will be working, in all likelyhood, soley on secure government contracts where it would be highly unlikely for them to sue (were I ever to have enough access to do anything stupid to one of their systems!) I'm not trying to penny-pinch, but I am wondering if the £200+ extra that PI costs could be put to better use in Critcal Illness cover or medical insurance as I am at the 'older' end of the contractor spectrum!

    I would appreciate any views on this.

  2. #2

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    Quote Originally Posted by cazzle View Post
    Hi all,
    This is my first post as a newbie contractor. Have set up Ltd company, got an accountant & bank a/c, registered for VAT & PAYE etc. I am now looking at insurance and see that the only compulsory insurance is Employers Liability (and even that is only compulsory whilst IR35 is still around).
    Wrong.

    Employers Liability is not compulsory if the only employee in your company is also the director.

    You also don't have to have public liability unless you are working from your home office and allow clients or customers to go there.

    Quote Originally Posted by cazzle View Post
    Is Professional Indemnity worth it?
    Yes.

    And it doesn't cost that much.

    Someone (I can't remember who) linked to the Co-op insurance website as a cheap option.

    And to be honest health insurance costs a lot more over the year than professional indemnity insurance.

  3. #3

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    Quote Originally Posted by cazzle View Post
    Hi all,
    This is my first post as a newbie contractor. Have set up Ltd company, got an accountant & bank a/c, registered for VAT & PAYE etc. I am now looking at insurance and see that the only compulsory insurance is Employers Liability (and even that is only compulsory whilst IR35 is still around).

    Is Professional Indemnity worth it? I will be working, in all likelyhood, soley on secure government contracts where it would be highly unlikely for them to sue (were I ever to have enough access to do anything stupid to one of their systems!) I'm not trying to penny-pinch, but I am wondering if the £200+ extra that PI costs could be put to better use in Critcal Illness cover or medical insurance as I am at the 'older' end of the contractor spectrum!

    I would appreciate any views on this.
    Its only 250 quid (less if count fact it comes out of gross) with QDOS and you get 3 free contract checks worth upwards of 150quid a pop so its small potatoes to sleep sound IMO
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    Broadly agree with what others have said. I wouldn't get any insurance if I didn't have to.

    Employers - not needed if the only company employees are directors too.

    Professional Indemnity - my opinion is that if your company gets sued then you just cease trading and they will get nothing out of it. Simple to do if your company has no assets, more difficult if it's built up a lot of good will or you have retained a lot of cash that you don't want to draw straight away.

    However, you may not have a choice about PI insurance - some clients demand that you have it. northernladuk makes a good pitch - it may be worth checking out the QDOS product:

    Quote Originally Posted by northernladuk View Post
    Its only 250 quid (less if count fact it comes out of gross) with QDOS and you get 3 free contract checks worth upwards of 150quid a pop so its small potatoes to sleep sound IMO

  5. #5

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    I use Qdos, as well, top service, can recommend them.

  6. #6

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    You only need insurance when something bad happens so just take it out the week before you get sued, OH!! of course who knows when that is likely to be and for what reason, you can leave the other insurance but get the PI its small potatoes in the grand scheme of things and a large percentage of agencies stipulate a minimum level in their contracts, nearly all mine have asked for mimimum Million pound cover

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    Quote Originally Posted by SueEllen View Post
    Someone (I can't remember who) linked to the Co-op insurance website as a cheap option.

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    I have been looking at indemnity insurance for my new contract and was going to go with QDOS - Prof Indem £147, EL/PL quoted at £96. However because my ltd co is set up as 2directors and 2 employees (husband and wife setup) EL/PL is now quoted at £150. Has anyone else been charged the same ?

  9. #9

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    Here's the Bust Card for avoiding the need for PI:

    Was it tested?
    If yes then blame the tester.
    If no then blame the PM.
    Don't blame me.
    Job motivation: how the powerful steal from the stupid.

  10. #10

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    Its better to have it and not need it, then need it and not have it!

    As mentioned I have gone with QDOS for my PI & PL, £250 all in, been told its basically worthless due to the wording (I have a friend who is a broker who quoted me £400 just for the PI for something that would hold up) but it covers the minimum and some clients will demand it.
    “Live a good life. If there are gods and they are just, then they will not care how devout you have been, but will welcome you based on the virtues you have lived by. If there are gods, but unjust, then you should not want to worship them. If there are no gods, then you will be gone, but will have lived a noble life that will live on in the memories of your loved ones.”

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