Indemnity for consulting

[Explosive Newt]

This is a bit of a new one on me but a bioscience company has asked if I would do some consulting / advisory work.

They have advised me to have liability insurance for the work (which is, without too much detail, going to be making recommendations about heart tissues and how they change in certain diseases).

The contract states
"Insurance and liability
You shall have personal liability for and shall indemnify us for any loss, liability, costs (including reasonable legal costs), damages or expenses arising from any breach by you, or any substitute engaged under this agreement, of the terms of this agreement, including any negligent or reckless act, omission or default in the provision of the Services and shall maintain in force during the period of this agreement adequate insurance cover with reputable insurers acceptable to us."

Is this a normal thing? Where could I get such insurance and how much is it going to cost me?

I'm not anticipating doing more than a few hundred pounds of work so I don't want to take on hefty insurance that cancels all this out.

[mik]

It's a while since I set up a company, but you can get indemnity insurance pretty easily, and yes it's a normal ask.

Just one example here.

It was only a couple of £hundred for me, but that was over a decade ago.

[Gavster]

It is fairly normal afaik, I used to have it with Hiscox when I was doing big 6 month projects

https://www.hiscox.co.uk/business-insurance/

[Simon]

Sounds like pretty standard professional indemnity insurance. My Dad still has his active despite winding up his tax practice and retiring a couple of years back because claims could arise years after the work. Something to bear in mind.

[240PP]

I also used Hiscox when I was contracting on datacentre projects. Think it was about £300 for £10m of cover.

[Rich B]

Not worth it to secure a few hundred pounds of work.

[DeskJockey]

Not worth it to secure a few hundred pounds of work.

Exactly this. Unless you're thinking of making a more permanent sideline in that sort of thing, it will just be hassle for no benefit.

[tim]

Doesn't matter what your fee is, the insurance isn't covering that, it's the liability you're potentially exposing yourself to.

[Rich B]

Doesn't matter what your fee is, the insurance isn't covering that, it's the liability you're potentially exposing yourself to.

It matters if you need to pay £300 for insurance when it’s a one off job to earn £200!

[Jobbo]

Don't do it. They should be taking on the risk if there are claims from third parties, not you - they'll be the ones selling your recommendations on. They will have insurance.

PI insurance is normal where you're self employed running a business, but not for ad hoc pieces of work like this. Simply obtaining cover for professional risks isn't like getting car insurance on the meerkat.

[scotta]

Don't do it. They should be taking on the risk if there are claims from third parties, not you - they'll be the ones selling your recommendations on. They will have insurance.

PI insurance is normal where you're self employed running a business, but not for ad hoc pieces of work like this. Simply obtaining cover for professional risks isn't like getting car insurance on the meerkat.

That only works if they are hiring you as an employee not a contractor.

[Jobbo]

Don't do it. They should be taking on the risk if there are claims from third parties, not you - they'll be the ones selling your recommendations on. They will have insurance.

PI insurance is normal where you're self employed running a business, but not for ad hoc pieces of work like this. Simply obtaining cover for professional risks isn't like getting car insurance on the meerkat.

That only works if they are hiring you as an employee not a contractor.

From the point of view of any customer/client of the employer, they only know that the employer has provided advice/service/product. So they would sue the employer if things went wrong. I do not think it is acceptable for a big company to then try to pass that liability on to a one man band consultant. I can't imagine this is massively different in IT to law, medicine or whatever but certainly it's not standard practice in a law firm.