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I have a lovely full-time web developer job that I don't wish to leave.

But, I've been offered some part-time work on the side. If I can persuade my main employer to give me permission to take on this side gig, what do I need in terms of insurance?

My main concern is that if, God forbid, I screw something up at the part-time gig, and (say) the business owner lost money because his website was down or functionally impaired for a long period, and decided to reclaim damages from me, I would rather not have to sell my house if I got sued.

(I don't expect to screw anything up, or to get sued, I'm an experienced developer... but YOU NEVER KNOW.)

Is it professional indemnity insurance that I need, or something else, and if so, is it actually going to save my ass if needed?

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If you're that concerned about liability, set up a Ltd company and run your side project through that. Your potential liabilities are then restricted to the assets of the Ltd company (but consult an accountant for details - there are some gotchas).

Everything will come down to contracts, so make sure that your (solicitor reviewed) contract includes liability limits.

The problem with liability insurance is that it can be expensive - especially if you don't have any track record. If you are going to have it, you need to make sure that you are very specific about the times when it will kick in. If a site goes down due to no fault of your own, e.g a hosting outage, then you should make sure that the contract states that you're not liable.

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    Insurance companies tend to be wary of "adverse selection", and might fear that people who are going to screw up are the ones most likely to want liability insurance, and so they're going to charge high rates. (Adverse selection is the phenomenon of people who are going to use insurance heavily wanting to apply, while those who would not cost the insurance company much will apply in fewer numbers.) – David Thornley Sep 7 '18 at 21:08
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    "Your potential liabilities are then restricted to the assets of the Ltd company" - but, see this question – Mawg Sep 8 '18 at 8:42
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    As a software developer with Ltd, I pay about GBP 100 annually for £1,000,000 liability insurance, but I think that's more in case I damage some equipment. However, ... "the business owner lost money because his website was down or functionally impaired for a long period, and decided to reclaim damages from me, "the business owner lost money because his website was down or functionally impaired for a long period, and decided to reclaim damages from me" - I doubt that insurance for that would be cheap, if you can get it. A Ltd costs about £99 of the shelf. – Mawg Sep 8 '18 at 8:47
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    Best talk with an accountant, who almost certainly won't charge you for advice, in the hope that they will get your business. – Mawg Sep 8 '18 at 8:47
  • If you form a limited company, consider joining the Federation of Small Businesses – they have some excellent benefits. fsb.org.uk/join-fsb/why-choose-fsb – David Aldridge Apr 18 at 21:57

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