Home > 

Blogs > 

Insurance for Contractors

Insurance for Contractors

by constructaquote - 23 September 2016


Choosing to run your own business is a great way of taking control of your own future, but it does come with considerable responsibilities.

Working as a contractor, it is sensible to ensure you have the right insurance policies in place to protect yourself, your business and your clients. In this article, we’re looking at what insurance policies you may need and why.

What is a Contractor?
If you’re already working as a contractor, then you’ll know the answer to this, but if it is a career move you are considering then it is important to understand what you are going into. A contractor is an individual who works through their own company providing specific services to other companies on a contract by contract basis. Contractors often go into larger firms and help provide a much-needed service that they either don’t have the in-house talent for or don’t need to hire in a full-time employee. Contractors work under set contracts for an agreed period of time. As a contractor you will probably enjoy many different projects throughout your career and benefit from great job variety and diversity. Taking care of your business is important which is why you need to protect your business against any potential insurance claims.

What Insurance Cover Do You Need?
It is recommended that contractors have professional indemnity insurance above all other types of cover. This is the key premium important for contractors, although you may also choose to invest in public liability and employers’ liability insurance, should you employ people to work alongside you.

Professional Indemnity Insurance:

As a contractor it is likely you offer advice and guidance as well as a service and therefore you need to ensure you are protected in the instance that your well-meaning professional advice doesn’t have a positive effect upon your client’s business.
Professional indemnity insurance is essential when it is your knowledge that a client is paying for as it will cover you should a client allege that you have caused them any degree of financial loss due to negligence or even dishonesty. If a case is made against you, you can inform your insurer and they will work to ascertain if you are to blame and cover you if this is the case.

Public Liability and Employers’ Liability Insurance:

Public liability insurance is often considered essential business cover; although it is not mandatory it does provide you with financial protection for any claims you may be liable for from either members of the public or other businesses as a result of work undertaken by you or your employees. This includes cover for damage to third party property and also accidental injury or illness.
Employers’ Liability however, unlike Public Liability insurance is compulsory as per the Employers’ Liability (Compulsory Insurance) Act 1969. Employers are responsible for the health and safety of their employees whilst at work, this Insurance ensures that you have a minimum level of cover in place in the event that an employee becomes injured or ill whilst in your employment and seeks compensation.

Contractor Insurance
Most contractor insurance packages include professional indemnity insurance as standard and further insurances will need to be arranged separately. If you are setting up as a contractor or are looking to renew or update your insurance, it is definitely worth considering all the above types of cover.