Hi Just some background first. I was asked by a friend of a friend if I could help out a small busineess regarding H&S advise, which I agreed to do. I gain permission from my employer and got the neccessary insurance etc. I have been carrying out this work for the last 5 years and now I want to end the contract.I spoke with my insurers and informed them of me wanting to finish the contract and they have advise me to continue to still have some insurance cover once the contract has finished. This cover will be at 50% of the current monthly price I am paying, and they have put the duration over to me ,but advise at least to have it for at least 2 years, after the contract finishs. I would welcome any members similar experience or advise and how long they kept paying insurance after finishing a contract. I have no issue in paying its just I was not aware of having to do this before taking on the contract, otherwise I may well have not took the work on, and it may act as a warning to others if you want to take on some additional work outside the day job, it needs to be costed in on your charges etc. Many Thanks

For a full-time consultant with a reasonable number of clients I suggest that it is prudent to insure your potential liabilities for some time after the advice has been given. However, with only a single client it may be that the potential for being sued for negligence is very low (assuming of course that you have given competent service!), thus making the argument for run-off cover less strong. It's the same question that's been debated here on several occasions: is the fear of being sued out of all proportion to the real risk?

Would setting up as a Ltd company avoid this situation?

It would be interesting to see some stats, if any are available; e.g. how many Consultants / Companies have had claims made against them when no PI/Insurance in place? what was the time scale in terms of the claim(s) against when work was carried out & consultant / company wound up the business? what issues gave rise to the claim(s)? Any insurance bods out there with the info'? Perhaps help in the decision making process.

Phil, Pete having a limited company will protect him for any advice given after the company comes into existence (whether or not that company has insurance) as the courts have ruled time and time again that they will not go behind the corporate veil in civil matters (except in exceptional cases, e.g. fraud). A limited company would not protect Pete for advice he has given prior to the limited company coming into existence. The whole purpose of a limited company is that it is that the company is a 'legal person' and subject to a director giving personal guarantees (e.g. to a bank to obtain a loan for the company), any contract (and therefore any liability) lies with the company and not its individual directors. In general terms the same applies to Limited Liability Partnerships ("LLPs"). If for example, Pete sets up a limited company this year that subsequently gives negligent advice and at the end of the year Pete (for whatever reason) decides to formally put the company into liquidation, the client could only sue the company and not Pete as an individual. If the company has no 'run-off' PI insurance, the client will receive nothing. Pete is safe, but I wouldn't fancy his chances of getting future work from that client. Sadly, in my world this happens on a daily basis (albeit I do not know of it happening to a health and safety practitioner for some time). Regards. DJ

I have had this issue and had to keep insurance on for a dormant business venture as I am now employed. The question is, for how long? Insurance companies bang on about this but there are no figures available to show that it is really an issue..................hmmmm any one smell scaremongering and vested interest here?

LB, I'm with you... do a "risk assessment"... What sort of consultancy was undertaken? Were recommendations and advice etc put into use immediately? Any long term type advice e.g. say an Asbestos Management Plan? etc If consultancy was about simple stuff like improving m/c guards, some manual handling training, getting FLT drivers certifcated, doing a workplace transport risk assessment etc then run off of 1 or 2 years seems adequate. But if you drew up an Asbestos Management Plan then 5 years might be needed - simply because it might take that long for some refurb work to be done that uncovers an error in the Plan. Phil

Thanks Phil Regards Victor

Interesting If you couple this thread with another recent one about seeing poor H&S control while out and about and then going and saying :- You shouldn't do it like that, do it like this - are you not giving advice. Or should you say don't do it like that, but I can not tell you how you should ? Playing devils advocate here. Chris

I've been asked to help review a SME's HSMS and really want to do so! This is at present my only 'self employed' venture and will generate a very modest income. I have given thought to the PI issue but am challenged by the small amount of fee and one client vs. the cost and duration of PI. I want to help the SME, I don't want to worry about the consequences of no PI - what to do? Would your assets (estate) form part of the considerations of your risk assessment - crudely speaking? Simon

This insurance lark sounds to me just like something a professional body would be able to advise on. Better still a professional body should be able to negotiate something for its members. A policy tailored to the risks associated with the activities of its professionally qualified members perhaps? Or am I being naive!

Graham See: http://www.iosh.co.uk/en...bership/IOSH-extras.aspx LB

Victor, I doubt your queries can be answered. I am not aware of any claims regarding professional negligence, only a handfull of criminal prosecutions. Personally, I think this caveat by insurance companies is nothing more than a cash cow promulgated by our so-called blame and claim culture. Apart from some specialist areas like asbestos I can't see where a claim could arise from which would satisfy the criteria for negligence. Just my opinion.

John M, not really sure what relevance the Hedley Byrne case has in respect to professional indemnity liability? It is a most unusual case within the boundary of financial impropriety.

Thanks Ray