Income Tax (Earnings and Pensions) Act 2003 section 349

Meaning of "qualifying insurance contract"

Section 349 defines what counts as a "qualifying insurance contract" for the purposes of the tax deduction available under section 346 for premiums paid on employment-related liability insurance.

• The insurance must only cover employment-related risks such as employee liabilities, vicarious liabilities, legal costs, costs of giving evidence or being investigated, and employer indemnification for payments made to employees in respect of these matters.
• The insurance period must not exceed two years, although it may be renewed for further periods of up to two years each, and the insured must not be obliged to renew.
• The insured must not receive any additional payment or benefit beyond the risk cover and the right to renew, unless the part of the premium attributable to that extra benefit is insignificant.
• The insurance contract must not be connected with another contract.