The Underscore Archives

Hi Ed,

Professional Indemnity (PI) insurance is not a legal requirement, to the best of my knowledge. However, as already stated, it is a very good idea and agencies are well within their rights to require you to hold this insurance to gain the contract.

The reasons for this are not quite what they said though. Public Liability covers you for 'accidents', whereas Professional Indemnity covers your professional services. So, if you advise someone to do something that turns out to be bad advice, the client could sue the agency and they could then, in turn, sue you for their damages. You might think 'that will never happen', but the topic is more complex than that. PI doesn't just cover bad advice, it also covers not providing advice that you could have and other things that you might not have thought of.

Also, if you are investigated by HMRC, it will go a long way to help you claim self-employed status as no employee is likely to hold this kind of thing.

In short, no it's not a legal requirement, but considering insurance packages which cover PI, Public Liability and Employers Liability only cost about £300 per year, it's a very, very good idea. And, not having it will mean that some agencies will not contract your services. We require PI for all of our contractors.

I hope that helps!

Ta,

Ben



-----Original Message-----
From: Ed Mitchell [mailto:ed at edmitchell.co.uk] 
Sent: 01 November 2007 14:30
To: underscore at under-score.org.uk
Subject: [_] Freelancing: Third Party indemnity: quick query

Hi all,

Quick question:

As a self-employed freelancer working in partnership with an agency on
a job, do I legally *need* third party indemnity insurance for a
workshop I am running next week?

The agency have it, and just told me that if _I_ caused some accident,
they would sue me if the client sued them, then suggested i might be
working illegally. (This is not a local agency; they are not on this
list).

background:

I work with a bunch of 'agencies' who vary in reasonable-ness:

some of them offer a 50/50 split of work and money and responsibility
with clear identification of who is who...

some of them treat you like a supplier while trying to get you to
pretend you are a 'strategic partner' in front of the clients, some
try to get you to use their email addresses and pretend you are part
of their thing, some insist on you using their 'language' etc. some
are real hoarders, others are great sharers, all of it is, I guess, a
neccessary part of working with/through agencies...

anyway - asides to the irritation, they also tell you different
things... so can anyone advise please?

Ta,
Ed

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