Insurance for Contractors

There are a number of different types of insurance for contractors that you might need to consider as a limited company contractor from the obvious, for example equipment insurance, to the less obvious such as Professional Indemnity insurance. Here's a quick two minute guide to some of the insurance policies that are the most popular:

Professional Indemnity Insurance

As a contractor people are paying you for your knowledge, your experience and your advice. And whilst you might be an expert in your field - however goods you are, there is always the possibility that at some point you might make a mistake, so you could then be liable for any loss to your client’s company. Claims can occur where a client suffers a financial loss as a result of alleged mistakes or omissions on your part. You may even be sued by a client who is merely dissatisfied, but has no valid claim, leading to substantial legal costs and time away from contracts.

Although claims against contractors are extremely rare it does make sense to have cover, also some clients will insist you have cover before letting you start your contract.

Clearly, the risks you face as a contractor will vary depending on your area of expertise. If you're working directly on the companies valuable data with little supervision, your exposure may be higher than if you're writing copy or developing concepts as a marketing consultant. As such, Professional Indemnity insurance would cover a contractor not only against claims for areas such as negligence, dishonesty or bad advice - but also against things like unintentional loss of data.

Employers' Liability Cover

As a limited company it is possible that, at some point, you may employ someone to work for you, even if only for a short period of time. If this is the case then you will need Employers’ Liability Insurance. As an employer, you are obliged to carry this type of cover by law, and this type of policy will cover any employees you may have for any injury sustained at work – with the legal minimum level of cover being £5m and going up to £10m. In fact, even if you are the sole 'employee' of your limited company, you should still consider taking out Employers' Liability Cover.

Public Liability Cover

This is a general policy which protects you against accidental damage to either your own and your clients’ property or equipment. It also covers you should any third party claim against you for injury or accidental damage whilst on your premises. For example, if someone visits your office (if you have one) and falls over a computer cable. It also covers you if you accidentally damage your client’s property whilst on their site, so is well worth considering even if you do not have your own premises.

For more information on Insurance for Contractors, please visit: http://www.sjdaccountancy.com/about/ourservices/insurance_for_contractors.html