Professional Indemnity Insurance cost

14ned

This new contract I'm taking on requires €1m of PI insurance cover and €2m of PL cover, despite that I will never work anywhere near the public. The best quote I can find online is €437 for PI and €162 for PL.

How does this compare to the premiums you're seeing?

Niall

Trojan

That's almost exactly what I was quoted (although I went for a lower limit as I didn't need that level of cover).

moycullen14

Public liability you have to have with a limited company.

As far as professional indemnity goes, I just wouldn't bother. Especailly if trading through a LTD. All you're doing is painting a target on your back.

A professional services company should have few or no assets so there's not much point in suing the company. PI changes that - it makes the company a target for litigation.

big syke

moycullen14 wrote: »

Public liability you have to have with a limited company.

Nonsense. The only compulsory insurance required by Law is motor and Employers Liability for some companies.

moycullen14 wrote: »

As far as professional indemnity goes, I just wouldn't bother. Especailly if trading through a LTD. All you're doing is painting a target on your back.

A professional services company should have few or no assets so there's not much point in suing the company. PI changes that - it makes the company a target for litigation.

OP said they require PI and PL for a contract so he will not get the contract in absence of this. It is also always good to protect you balance sheet with insurance.

OP this is a relatively competitive quote. Although my advice is to go with a broker see what deal they may get you.

14ned

big syke wrote: »

Nonsense. The only compulsory insurance required by Law is motor and Employers Liability for some companies.

If you ever could work where the public have access to, then you would be wise to take out PL insurance. It's fairly inexpensive, and what happens in practice is that whoever is claiming arrives at some settlement with your insurers for like jamming their fingers in a door where you just happened to be working etc.

big syke wrote: »

OP said they require PI and PL for a contract so he will not get the contract in absence of this. It is also always good to protect you balance sheet with insurance.

It's even stronger than that: the contract wording says no money will be paid until I supply proof of both insurances for the values I mentioned. I am also contractually obliged to maintain that level of insurance for a year after termination.

The funny part is of course that big multinationals very rarely sue you under PI. Most of the legal risk comes from small business owners who feel wronged by you under some issue or other. I had someone recently asking for a quote for a bit of piece work and was appalled at the 15k/month I quoted him. But I could tell in advance there was a good likelihood he'd sue me if I didn't deliver exactly what he wanted, which was amorphous and unspecific. Filled me with risk worries, so quote went up.

big syke wrote: »

OP this is a relatively competitive quote. Although my advice is to go with a broker see what deal they may get you.

Sigh. They still haven't actually delivered me a contract. I'm kicking my heels here in a B&B in Dublin at my own expense. They say any day now. Yay contracting.

Niall

big syke

14ned wrote: »

If you ever could work where the public have access to, then you would be wise to take out PL insurance. It's fairly inexpensive, and what happens in practice is that whoever is claiming arrives at some settlement with your insurers for like jamming their fingers in a door where you just happened to be working etc.



It's even stronger than that: the contract wording says no money will be paid until I supply proof of both insurances for the values I mentioned. I am also contractually obliged to maintain that level of insurance for a year after termination.

The funny part is of course that big multinationals very rarely sue you under PI. Most of the legal risk comes from small business owners who feel wronged by you under some issue or other. I had someone recently asking for a quote for a bit of piece work and was appalled at the 15k/month I quoted him. But I could tell in advance there was a good likelihood he'd sue me if I didn't deliver exactly what he wanted, which was amorphous and unspecific. Filled me with risk worries, so quote went up.



Sigh. They still haven't actually delivered me a contract. I'm kicking my heels here in a B&B in Dublin at my own expense. They say any day now. Yay contracting.

Niall

Yep Insurance obligations in contracts tend to be quite strict. Everyone is just looking to protect themselves.

The whole rational behind keeping the insurance 1 year after the contract ends is because PI insurance policy is on a claims made basis. It will pay out any claim made during the policy period, regardless of when the claim happened. All work is covered as far back as the start date of the policy or the retroactive date.

So the company requiring the cover from you wants this extra time as a cushion.

moycullen14

ANyone know of a case where a contractor was sued under PI? Can't say I've ever heard of it happening.

14ned

moycullen14 wrote: »

ANyone know of a case where a contractor was sued under PI? Can't say I've ever heard of it happening.

For small business relationships, it's quite common. The spec is to assemble various OTS software components into some package. Some bug in one of the OTS components causes some random interaction very hard to track down. Client gets pissy and sues. I generally insist on contractually zero responsibility for problems in any code that I did not personally write, and almost always clients go elsewhere. Clients also get pissy when their failure to install updates and unwillingness to pay for me to support the deliverable causes them financial loss.

You can almost always win these cases in court because you have proof you told the client this stuff in writing, but it sucks down time better spent earning and bringing in new business.

Last few years I only work with multinationals. Their processes are like treacle, but contracts are longer and less hassle once they finally issue a contract.

I have only heard of one colleague who got sued and his PI paid out. He was working in the HFT space remotely. They accused his remote station of introducing viruses into their secure network, causing theft of intellectual property. Rather than employ expensive lawyers, he let the PI pay out, and then of course couldn't find any work in finance ever again. He went permanent into games I think.

Niall

14ned

14ned wrote: »

This new contract I'm taking on requires €1m of PI insurance cover and €2m of PL cover, despite that I will never work anywhere near the public. The best quote I can find online is €437 for PI and €162 for PL.

Ok, I finished ringing around the brokers, and here are my results. I was trying to get as close in Ireland to QDOS in the UK which have this tasty quote:

PL £75 (2M sterling)
PI £162 (1M sterling)

They underwrite their insurance themselves, and there are more exclusions in the small print than you could drive a truck through. It's insurance purely for ticking the box "I have PI insurance" for the contract. But as most IT contracting companies have no assets (assuming their have put their pension fund at arm's length), the only risk here is lots of hassle and being struck off from ever running a company in Ireland again. Most agencies won't bother trying to claim from you when they realise your insurance isn't worth a penny to them and you have no assets.

Anyway, best I could get in Ireland was via online, none of the brokers could beat these over the telephone:

www.freelanceinsure.ie

PL €162 (2M, RSA) [you also get office contents insurance, business interruption, employer's liability)
PI €437 (1M, RSA)

http://www.professionalindemnityinsurance.ie/professional-indemnity-insurance-quotes.php

PL €149.45 (2.6M, Hiscox)
PI €494.90 (1.3M Tokiomarine HCC)
PI €551.60 (1.3M Hiscox)


The latter, per euro of insurance, is cheaper. But they won't let you choose 2M and 1M, only 2.6M and 1.3M. So they come out more expensive when your contract only requires 2M and 1M.

I hope the above is of use to others.

Niall

14ned

14ned wrote: »

Ok, I finished ringing around the brokers, and here are my results. I was trying to get as close in Ireland to QDOS in the UK which have this tasty quote:

PL £75 (2M sterling)
PI £162 (1M sterling)

So yeah, I have news on that.

It turns out the QDOS UK will do business here in Ireland if you approach them by email! It's a different division, same group. And wait till you see what I paid for my insurance:

PL €88.15 (€2.6M limit)
PI €208.29 (€1.3M limit)

Which is only a little more expensive than in the UK, some of which is due to the higher taxes on insurance levied here in Ireland and so not their fault. The underwriter is Tokiomarine HCC, and I've received the policy documents, they're 100% legit Irish issued insurance under Irish law.

Now that above is half the price of anywhere else I could find in Ireland, and a third or a quarter of what most were charging. And it's competitive with the UK market, which I like to see. If your PI or PL insurance is coming up, or you need to go get some due to contract requirements, try emailing freelancer@qdoscontractor.com and see if they can similarly way undercut your existing insurance.

Niall