Professional indemnity for employees

lorrainp

Hoenir said:

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. 

Are you suggesting that I should just sign it and stop worrying? I'm not really keen to sign a legal document that I'm concerned about without seeking legal advice. Just because other people have signed it doesn't necessarily mean it's ok. 

I have discussed it with the employer, and they don't want to remove it as they say it is a standard clause provided by their HR advisors.

Sorry for being dumb but I'm not sure what you are advising?

lorrainp

Just to get back on track - my original question was whether any providers offer insurance that would cover me for these contractual clauses, on the basis that I expect I'll need to sign it if I want the job, and I don't want to leave myself exposed to the possibility, however unlikely, of being liable for a huge debt to the company. 
I think it would be Professional Indemnity that I'd need.

Do any of you know of any insurers who might provide this cover please?

DullGreyGuy

lorrainp said:

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.

But your plan should be reviewed by those that have contributed to it and signed off by at minimum the sponsor/owner and more likely the Board/Steer Co or whatever language you use for the governance structure. 

I'm all for personal accountability but a PM is personally responsible for very few of the big decisions. For an employer to have a lawful basis of deduction they would have to show you personally were liable and this is not a scenario where just basic project good practice would at a minimum only show you contributed to the problem but didnt weren't solely responsible. 

Even with insurance you still need to act with reasonable care and if you are going so off piest that you arent running governance, not doing reporting etc then you may fall foul of the reasonable care clause. Certainly for a dropped laptop or such chances of claims are higher but then thats likely to fall within the policy excess anyway. 

lorrainp

DullGreyGuy said:

But your plan should be reviewed by those that have contributed to it and signed off by at minimum the sponsor/owner and more likely the Board/Steer Co or whatever language you use for the governance structure. 

I'm all for personal accountability but a PM is personally responsible for very few of the big decisions. For an employer to have a lawful basis of deduction they would have to show you personally were liable and this is not a scenario where just basic project good practice would at a minimum only show you contributed to the problem but didnt weren't solely responsible. 

Even with insurance you still need to act with reasonable care and if you are going so off piest that you arent running governance, not doing reporting etc then you may fall foul of the reasonable care clause. Certainly for a dropped laptop or such chances of claims are higher but then thats likely to fall within the policy excess anyway. 

I get your point, and just to play it out fully - this would mean that there's no point in PMs who are contractors having professional indemnity insurance either then, right?

Hoenir

lorrainp said:

Hoenir said:

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. 

Are you suggesting that I should just sign it and stop worrying? I'm not really keen to sign a legal document that I'm concerned about without seeking legal advice. Just because other people have signed it doesn't necessarily mean it's ok. 

I have discussed it with the employer, and they don't want to remove it as they say it is a standard clause provided by their HR advisors.

Sorry for being dumb but I'm not sure what you are advising?

Have you bothered to ask your Employer whether they have Professional Indemnity Insurance in place to cover the actions of all their own employees.  If so. What risks are covered and the monetary level. 

DullGreyGuy

lorrainp said:

DullGreyGuy said:

But your plan should be reviewed by those that have contributed to it and signed off by at minimum the sponsor/owner and more likely the Board/Steer Co or whatever language you use for the governance structure. 

I'm all for personal accountability but a PM is personally responsible for very few of the big decisions. For an employer to have a lawful basis of deduction they would have to show you personally were liable and this is not a scenario where just basic project good practice would at a minimum only show you contributed to the problem but didnt weren't solely responsible. 

Even with insurance you still need to act with reasonable care and if you are going so off piest that you arent running governance, not doing reporting etc then you may fall foul of the reasonable care clause. Certainly for a dropped laptop or such chances of claims are higher but then thats likely to fall within the policy excess anyway. 

I get your point, and just to play it out fully - this would mean that there's no point in PMs who are contractors having professional indemnity insurance either then, right?

Normally it's a contractual obligation so it's not a choice matter. 

There is a slight kink though, anyone can sue anyone, even if it's groundless and it can take time/money to defend even baseless claims. As an employee your legal expenses cover on your home insurance potentially will cover any actual dispute even if they won't cover the losses in the unlikely event of you losing. As a LTD your home insurance certainly won't cover such things. 

My experience as a contractor is that no one ever checks the policy beyond the certificate's sum insured. There are some budget policies out there with vast holes in them, especially for someone like me, but they are very cheap and sell well. Policies are also written on a "claims made" basis so the fact I have insurance today is broadly irrelevant; I would need to have insurance in a years time, or whenever they have discovered the problem and gathered evidence etc. 

Claims experience is totally different for "traditional" PI (lawyers, accountants, surveyors, brokers etc) and "non-traditional" (PMs, Primal Scream Therapists etc). The former pays out a decent amount of both defence and liability whereas the former is much more heavily weighted to defence. Hence why solicitors can pay up to 5% of their fee income for their insurance whereas I pay less than a days pay (and could pay less than 2 hours pay)

Personally I do buy decent PI insurance, but as a contractor its easier for them to claim "my share" of responsibility than it would be against an employee, I also deal with projects in the billions of costs so even if they could prove a tiny percentage of an error was my fault it would be a much more substantial loss. 

Savvy_Sue

Do you have a professional body who might offer advice or point to who might offer such cover for employees? 

Marcon

lorrainp said:

Just to get back on track - my original question was whether any providers offer insurance that would cover me for these contractual clauses, on the basis that I expect I'll need to sign it if I want the job, and I don't want to leave myself exposed to the possibility, however unlikely, of being liable for a huge debt to the company. 
I think it would be Professional Indemnity that I'd need.

Do any of you know of any insurers who might provide this cover please?

If you look at what the ABI has to say https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/liability-insurance/professional-indemnity-insurance/#:~:text=Professional%20indemnity%20insurance%20protects%20you,or%20offered%20advice%20for%20free. you'll see their take on when PI cover is appropriate.

Nothing to stop you consulting a good broker and seeing if they can place the business, although it probably isn't going to be classed as PI cover.

EnPointe

lorrainp said:

DullGreyGuy said:

But your plan should be reviewed by those that have contributed to it and signed off by at minimum the sponsor/owner and more likely the Board/Steer Co or whatever language you use for the governance structure. 

I'm all for personal accountability but a PM is personally responsible for very few of the big decisions. For an employer to have a lawful basis of deduction they would have to show you personally were liable and this is not a scenario where just basic project good practice would at a minimum only show you contributed to the problem but didnt weren't solely responsible. 

Even with insurance you still need to act with reasonable care and if you are going so off piest that you arent running governance, not doing reporting etc then you may fall foul of the reasonable care clause. Certainly for a dropped laptop or such chances of claims are higher but then thats likely to fall within the policy excess anyway. 

I get your point, and just to play it out fully - this would mean that there's no point in PMs who are contractors having professional indemnity insurance either then, right?

the contractor  is, if outside IR 35, neither a worker for or an employee of the Employer , there have a B2B relationship , therefore the  employer is not vicariously liable 

DullGreyGuy

EnPointe said:

lorrainp said:

DullGreyGuy said:

But your plan should be reviewed by those that have contributed to it and signed off by at minimum the sponsor/owner and more likely the Board/Steer Co or whatever language you use for the governance structure. 

I'm all for personal accountability but a PM is personally responsible for very few of the big decisions. For an employer to have a lawful basis of deduction they would have to show you personally were liable and this is not a scenario where just basic project good practice would at a minimum only show you contributed to the problem but didnt weren't solely responsible. 

Even with insurance you still need to act with reasonable care and if you are going so off piest that you arent running governance, not doing reporting etc then you may fall foul of the reasonable care clause. Certainly for a dropped laptop or such chances of claims are higher but then thats likely to fall within the policy excess anyway. 

I get your point, and just to play it out fully - this would mean that there's no point in PMs who are contractors having professional indemnity insurance either then, right?

the contractor  is, if outside IR 35, neither a worker for or an employee of the Employer , there have a B2B relationship , therefore the  employer is not vicariously liable 

A contract can make a company vicariously liable for those doing the undertaking of the contract irrespective of those persons are an employee, worker, contractor, consultant etc though their contract with none employees should include indemnity clauses so its a pass through