Useful Information As Regards Contractor Insurance

By Author: Jack. Harris.
Total Articles: 3
Comment this article

It is important that one fully grasps what the IR35 Insurance law stipulates and how it can be used in favor of any freelancer such as an IT contractor sole trader.

It is important that one fully grasps what the IR35 Insurance law stipulates and how it can be used in favor of any freelancer such as an IT contractor sole trader. This law was, basically, designed to cover the freelancer against several risks. The common risk is when you come under status review by HMRC the IR35 Insurance will take care of the legal costs involved. At the same time this contractor insurance will go a long way in increasing your marketability as a contractor or a consultant. Since you will get better contracts if you are covered by the IR35.

Regardless of the mobile nature of jobs such as IT and consultancy the client often requires professional indemnity insurance. This is where contractor insurance comes in. To cover both professional indemnity and business liability. The IR35 insurance is, thus, essentially designed to cover all your limited company expenses with regards to the risks outlined above.

The risks such as negligence ...
... which occurs when you as the contractor say the IT contractor sole trader, fail in your duty of care to your client. These risks are adequately covered by Personal Indemnity, PI, insurance which essentially is just a form of limited company insurance. The IR35 Insurance has its own set of rules and the ir35 rules are very specific on the kind of risks that are covered.

A little aside will suffice before we delve deep into the ir35 rules to understand the genesis of the rather distinct name IR35. IR35 Insurance takes its name from an Inland Revenue press release that gave birth to the Intermediaries Legislation designed to prevent the use of intermediaries for the sole purpose of evading paying income tax and National Insurance.

The ir35 rules became law in the 2000 Finance Act (Schedule 12), they effectively clamp down on contractors and other groups of workers who flip between being “independent contractors” one day and “full time employees” the next in order to avoid paying taxes.

So, as an independent contractor it is incumbent upon you to take this form of tax investigation cover that is known as IR35 Insurance. This is in order to hedge against Limited Company Expenses. As a sole contractor this form of Limited Company Insurance is the key to protecting your interests in the unlikely event that you come up for a status review by HMRC. This Contractor Insurance will take the pain out of such an unfortunate turn of events; giving you great peace of mind.

While considering any form of insurance you should, of course, take time out to fully grasp all that the contract entails so that you can make an informed decision. One of the obvious benefits of the IR35 is the fact that it will cover your Limited Company Expenses comfortably. Your Limited Company Expenses, such as accidental damage to property at the workplace and other work related risks having been well taken care of, you can do your job to perfection. IR35 is quite simply the ultimate in contractor insurance.
Resource: http://www.companybug.co.uk/what-is-ir35-insurance/