Insurance 101

Just because you have set up a limited company in the UK doesn’t mean you need professional indemnity insurance. Your need for this type of cover is determined by whether your company is trading and what it does.

In short, no. It isn’t. Professional indemnity and public liability insurance are both legal covers, meaning you’re protecting yourself and your business against legal threats from clients and third parties. However, there are subtle differences and whether you need one, the other or both does depend on your business activities.

When it comes to start up business insurance costs UK insurance providers have the tendency to treat aspiring business owners with some caution. This conservative approach can lead to higher costs and restrictive cover. If you are about to set up a business, keeping costs down is no doubt important.

There are a number of factors that determine how much you will pay for business liability insurance - your profession, the extent of your business activities, how much you make and your claims history.

There are a number of gauges you can use to assess the right answer for your situation unless it isn’t already made clear to you in the proposed IT contract conditions you have received from your agency or a client.

A question that has recently risen in popularity among contractors as a result of the updated private sector IR35 legislation. Previously HMRC was mostly focusing on the larger companies but now they’re turning up the heat and individual contractors are very much in the spotlight.

Imagine you’ve just delivered the last piece of work for your client and plan to take some time off, perhaps for good. Cancelling your professional indemnity cover is an option but not a very good one. The work you did in the past may still catch up with you in the future and since professional indemnity insurance (PI) works on a ‘claims made basis’, you won’t be able to access its benefits unless you have an active PI cover in place.

A retroactive date is a line in the sand which determines a specific point in the past from which your insurers have agreed to insure your business. You are effectively allowed by some insurers to backdate your professional indemnity (PI) cover so that your business is protected against possible claims as a result of your past work.