As a contractor it’s essential that you have the right types of insurance in place. Not only for peace of mind should anything go wrong, but insurance may also be a legal requirement for some contractors. Having the right contractor insurance will also make you a stronger contender when tendering for new contracts and business.
In a vast majority of cases, contract conditions will insist that you hold certain insurance cover, usually employers’ liability, public liability and professional indemnity. Failure to provide this cover could lead to breach of contract. Many clients and agencies will also insist on seeing proof of your cover arrangements.
Here is a brief look at the different types of contractor insurance you should consider taking out:
This type of insurance provides indemnity in respect of your legal liability to third parties who suffer a financial loss as a result of an alleged negligent act, error or omission arising from the provision of your professional services.
This insurance will meet the cost of defending claims and any damages payable. It’s mainly applicable to any person who gives advice, designs, or offers similar services in a professional capacity.
Whether you are working from your own premises or at a client’s site, you have a duty to protect anyone who may be impacted by your day to day work. If you do not have appropriate cover and someone is injured, or a property is damaged because of your actions, you could be liable for compensation.
Public Liability insurance provides indemnity protecting you against any costs and compensation awards you are legally liable to pay as a result from accidental injury or disease to any member of the public or business, or any accidental loss or damage to their property, arising from your business activities.
Employers’ liability insurance is a compulsory insurance for all employers with limited exceptions in law. The only exception to this is a limited company employing only its director, who also owns 50% or more of the share capital. It would of course be good practice for all contractors to cover themselves in case of any eventualities.
This insurance provides you with indemnity against any costs and compensation awards you are legally liable to pay resulting from injury or disease to any employee during the course of their employment.
The minimum limit for employers’ liability cover is £5 million. You will however find that most standard policies cover you for up to £10 million.
This type of policy provides financial protection for you as the director of the company against being sued as a result of your company’s’ performance in relation to the duties you have been hired to conduct.
You have numerous responsibilities as a company director which you are liable for when running a limited company, and this cover provide you with adequate protection for defence legal costs to protect your financial assets.
This insurance is provided on a claims basis, so to ensure you are covered, you need to have a policy in force at all times.
This type of policy provides a lump sum for death or permanent disability, or weekly benefit for the time it takes for you to recover from an injury, as a result of an accident at work. You are also covered on your commute to or from your place of work.
This insurance protects you from the potential devastating effects of suffering serious illness. It pays a lump sum to help with changes that need to be made to the home, ease the pressure of mortgage repayments and convalescence.
Income Protection Insurance is vital to any contractor. It protects your lifestyle and living requirements if you are unable to work due to illness or accident. Contractors are exposed to financial risk which this insurance can help alleviate.
If you’re interested in obtaining more information about contractor insurance, Boox have a relationship with specialist insurance providers Kingsbridge Professional Solutions who offer a Professional Indemnity Package for Contractors and Freelancers. You can have a policy which encompasses all of these insurances for just £424 per year – less than £36 per month.