We recently advised all readers to ensure that they get Professional Indemnity Insurance to protection against claims made against them.
There is also the need for the insurance to help show that you are indeed a genuine business which might help with IR35 status disputes.
You must ensure that you behave like a genuine business so that if you go to court you have the necessary ammunition. For example, if you have business cards, letter heads, compliment slips, PI, tax insurance, a web site, etc…… you will have a better chance of convincing the judge you are a business than someone who has nothing.
Tax Protection insurance is something else that you need.
The Federation of Small Businesses offers Tax Protection Insurance to its members. Members can claim on the insurance based on an appeal against the IR for IR35.
The criteria they would use for deciding whether to allow an insurance claim for an IR35 appeal would be based on whether they thought the contract was one for services (self-employment). Concerns were raised regarding the fact that it is an extremely difficult area to decide on but, it will be the same criteria used by any insurance company. They will cover you for £50,000.