Can I insure against IR35?

Caunce O'Hara & Co Ltd Logo
Written by Caunce O'Hara
Last updated December 13, 2019

There are measures contractors can take to mitigate the potential fallout from the private sector IR35 rules, but can contractors insure themselves against IR35?

Yes, you can protect yourself against both the cost of an HMRC enquiry AND the potential tax loss if HMRC can successfully argue that IR35 applies to your engagement, and if you insure with Caunce O’Hara, you can ensure that you are protected for many other potential liabilities.

Contractors should always make sure they are adequately insured. If you’re a freelance contractor, then you will undoubtedly hold both professional indemnity insurance and public liability insurance as these two insurance policies are often stipulated in contracts before the work is awarded.

At Caunce O’Hara we also offer a range of insurance products that are more specific to IR35 legislation, including:

Legal Expenses Insurance

Caunce O’Hara’s Legal Expenses Insurance provides you with £100,000 of cover, in any one claim, for legal representation costs incurred in the event of an IR35 investigation against you.

The policy is split into two tiers. Tier 1 being the core cover the policy provides, and Tier 2 being the extra cover that is available to you.

The policy provides cover for the following:

  • Employment disputes
  • Employment compensation awards
  • Property and landlord and tenant disputes
  • Criminal defence
  • Tax protection
  • Regulatory compliance
  • Court attendance costs including jury service
  • Employment extra protection
  • Identity theft
  • Contract disputes

Find out more.

IR35 Contract Review

Contract Reviews are available for only £60.00 per contract when purchased with the Legal Expenses Insurance policy. The contract review will look at both the specific contract signed by the contractor and the working practices of the contract. The review will be undertaken by an IR35 Contract Reviewer whose procedures have been approved by our partners. The review must pass the contract/engagement as being outside IR35, and not caught by the IR35 Intermediaries Legislation.

Find out more.

Tax Losses Insurance

Based on the result of the IR35 Contract Review determining the contractor to be working outside IR35, this policy will cover the net tax loss, which arises when HMRC successfully argue that an Insured’s Qualifying Contract falls within the scope of IR35. The contract review must “pass” the contract/engagement as being outside IR35 before the Tax Losses Insurance policy will be made available to purchase.

Professional Expenses Insurance

PEI is an insurance policy, which must be taken out with the Tax Losses Insurance policy, that ensures a HMRC IR35 investigation can be professionally defended by extending the notification period.

The notification period is the period of insurance during which the insured person is entitled to make a claim plus any extension by virtue of the Professional Expenses Insurance and the renewal of the Professional Expenses Insurance, which is taken out with the Tax Losses policy.

The insured person must continue to renew their PEI even when not undertaking any contracts otherwise they will invalidate the Tax Losses Insurance policy.


This material is intended for general information purposes only and does not constitute legal advice. Specialist legal advice should be taken in relation to specific circumstances.


Contractors concerned about their IR35 status can take steps to protect themselves

Contractors, IR35 and being prepared 

IR35 Products & services

Caunce O’Hara’s partnership with Markel enables us to offer a broad range of IR35-based products to protect contractors, fee-payers and end clients across the UK.

IR35 Hub Related IR35 content