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PI, PL, EL - business/professional insurances
by Coulson Pritchard at 16:47 28/01/03 (Conference Papers)
A complex and once expensive area of freelancer finance, the various types of Business/Professional Indemnity Insurance can be a mystery. Shout99 partner, Coulson Pritchard examines the differences.
Business insurances can protect your company against financial loss and also assist freelancers in securing contracts and be a contributing factor to demonstrating to the Inland Revenue that their companies fall outside IR35.

There are three types of insurance that freelancers should consider – prices start from as little as 165 per annum.

Professional Indemnity (PI)
Provides financial protection to meet the cost of defending any claims made against your company. Claims can occur where a client suffers a financial loss as a result of alleged mistakes or omissions on your part.

Public Liability (PL)
Protects you against your legal liability where you accidentally cause damage or loss to someone else's property. Also, if you accidentally cause injury to someone whilst working at a clients premises

Employers Liability (EL)
This insurance is arranged to protect employers against claims for injury or illness brought by employees.

With the increase in IR35 friendly contracts and over-supply in the marketplace, industry experts have witnessed that insurance can provide freelancers with a distinct business advantage.

Paul Thorpe, founder of freelancer service provider Coulson Pritchard Associates states “At a time when most PLC’s are seeking to reduce costs and risk, the procurement of contract resources has undergone change. Agencies/Clients are increasingly asking to see proof of professional indemnity insurance from individual freelancers before awarding their contracts. Although mistakes and claims in the industry are rare, they can be costly. As such turning up to an interview with an up to date insurance policy can only improve your marketability”.

Furthermore, Thorpe adds “Having Professional Indemnity Insurance supports your Independent status. The IR35 “in business on own account test” indicates that companies with insurance are more likely to be considered a proper entrepreneurial company and therefore a pointer for being outside IR35. This may help you argue against an IR35 ruling. Premiums are fully allowable against tax”.

Shout99 provides a range of insurance services to its members. These can be found in the insurance section of the Freelancer Service area of the website.

To comment on this conference paper or ask questions, please use the 'Reply' button below

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Coulson Pritchard


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