Professional indemnity for employees

lorrainp

Hi folks,

Does anyone here know of any insurers that offer professional indemnity insurance for full-time permanent employees (as opposed to contractors or freelancers)?

I know this is an unusual request so I don't know if it even exists!

Hoenir

Wouldn't this be covered under the businessess own commercial insurance cover? 

Andy_L

What's your profession and what are you trying to cover yourself against? Claims from your employers customers or claims from your employer?

DullGreyGuy

lorrainp said:

Does anyone here know of any insurers that offer professional indemnity insurance for full-time permanent employees (as opposed to contractors or freelancers)?

I know this is an unusual request so I don't know if it even exists!

What are you trying to protect against? Your employer's client suing you? Your employer suing you for making an error? Or are you a member of an institute where you can be penalised for not maintaining their standards like the actuarial one?

Generally the first can't happen and the client would sue the employer. 

The second would need to be in your contract of employment and it would be rare to see such clauses and even if there is it could be subject to challenge and cannot reduce you below minimum wage. There are some additional protections like retail staff cannot have more than 10% of their salary docked if the till is light unless its their final salary. 

EnPointe

lorrainp said:

Hi folks,

Does anyone here know of any insurers that offer professional indemnity insurance for full-time permanent employees (as opposed to contractors or freelancers)?

I know this is an unusual request so I don't know if it even exists!

Generally  this is a matter when the employer is vicariously liable. 

I know the Health Professional Sphere  there has been a push back from the insurers and the unions  to remind employers of their  vicarious liability 

lorrainp

Thanks for the replies.  This is for a project manager role in the tech sector.  The reason for my enquiry is this employment contract section, specifically the bits I've marked in bold italics:

"By signing these terms and conditions of employment you consent to a deduction from any sum otherwise payable to you, the value of any claim the Company may have against you including but not limited to :-

[..]

2.   Any losses, insurance excess payments or insurance premium increases sustained by the Company as a result of the loss of, damage to or unauthorised use of any Company property or that of any client, customer or supplier, which is caused through your carelessness, negligence, wilful default or dishonesty;

[..]

7.      Where the Company has sustained loss in relation to monies of the Company caused through your negligence, recklessness, dishonesty or through breach of the Company rules the Company requires the employee to repay any proven loss`;

If, on the termination of your employment, your final payment of wages is not sufficient to meet your debt due to the Company, you agree that you will repay the outstanding balance to the Company within one calendar month of the date of termination of your employment, such payment to be made as agreed with the Company."

EnPointe

lorrainp said:

Thanks for the replies.  This is for a project manager role in the tech sector.  The reason for my enquiry is this employment contract section, specifically the bits I've marked in bold italics:

"By signing these terms and conditions of employment you consent to a deduction from any sum otherwise payable to you, the value of any claim the Company may have against you including but not limited to :-

[..]

2.   Any losses, insurance excess payments or insurance premium increases sustained by the Company as a result of the loss of, damage to or unauthorised use of any Company property or that of any client, customer or supplier, which is caused through your carelessness, negligence, wilful default or dishonesty;

[..]

7.      Where the Company has sustained loss in relation to monies of the Company caused through your negligence, recklessness, dishonesty or through breach of the Company rules the Company requires the employee to repay any proven loss`;

If, on the termination of your employment, your final payment of wages is not sufficient to meet your debt due to the Company, you agree that you will repay the outstanding balance to the Company within one calendar month of the date of termination of your employment, such payment to be made as agreed with the Company."

it appears that the Employer  does not understand the concept of vicarious liability. 

it  woulbe be in your interests to have a Trades Union  or your own Lawyer  review the contract .

Hoenir

Professional Indemnity insurance protects businesses and individuals offering professional services from claims of negligence, errors, or omissions in their work that cause financial loss to a client.  Somewhat different scenario to those you've highlighted from the employment contact. 

DullGreyGuy

lorrainp said:

Thanks for the replies.  This is for a project manager role in the tech sector.  The reason for my enquiry is this employment contract section, specifically the bits I've marked in bold italics:

"By signing these terms and conditions of employment you consent to a deduction from any sum otherwise payable to you, the value of any claim the Company may have against you including but not limited to :-

[..]

2.   Any losses, insurance excess payments or insurance premium increases sustained by the Company as a result of the loss of, damage to or unauthorised use of any Company property or that of any client, customer or supplier, which is caused through your carelessness, negligence, wilful default or dishonesty;

[..]

7.      Where the Company has sustained loss in relation to monies of the Company caused through your negligence, recklessness, dishonesty or through breach of the Company rules the Company requires the employee to repay any proven loss`;

If, on the termination of your employment, your final payment of wages is not sufficient to meet your debt due to the Company, you agree that you will repay the outstanding balance to the Company within one calendar month of the date of termination of your employment, such payment to be made as agreed with the Company."

Deductions are possible, as long as it doesnt take you below minimum wage (other than your last payslip), as long as it's in your contract and you've agreed to it. The employer would have to demonstrate its solely down to you and substantiate it all. If you were unhappy with it then it'd be an employment tribunal on unlawful deductions which most employers dont want to face. 

Dont have any of my perm contracts to hand but fairly sure such clauses have existed and have never been used. As a project manager really there should be very little that stick on you given you facilitate and dont actually make any of the material decisions yourself. That leaves silly things like damaging the company laptop or such which I've known countless people to do and even as a contractor haven't been charged for a dropped laptop with cracked screen etc. 

Ultimately if you are concerned you should seek professional advice but there is a big difference between having clauses and actually using them. 

lorrainp

I've already instructed an employment lawyer to spend an hour reviewing and providing feedback. 

With this post, I'm just trying to get ahead of things and find out if anyone knows of any insurers who may provide cover for these clauses?

I'm thinking worst case scenario, what if I were running a big project and somehow messed up planning the implementation so that it was done outside of the client's approved maintenance window, and their network was therefore down at a time when they expected it to be up, and they suffered financial loss as a result, which could run into many hundreds of thousands of pounds or more? Then the client sues my employer or refuses to pay their bill, or whatever.
This clause gives my employer the right to recover their loss from me, right?

That's just one example of why I'm thinking professional indemnity insurance may be needed here.

Hoenir

lorrainp said:

I'm thinking worst case scenario, what if I were running a big project and somehow messed up planning the implementation so that it was done outside of the client's approved maintenance window, and their network was therefore down at a time when they expected it to be up, and they suffered financial loss as a result, which could run into many hundreds of thousands of pounds or more? Then the client sues my employer or refuses to pay their bill, or whatever.
This clause gives my employer the right to recover their loss from me, right?

That's just one example of why I'm thinking professional indemnity insurance may be needed here.

If you are an employee then why aren't you discussing your concerns directly with your employer.  I'm 100% certain that you've received a standard contract that many other employees have happily agreed to. People wouldn't accept the roles if they were personally exposed or liable to unlimited losses or costs.