What insurance do I need as a contractor? A guide to contractor insurance
Posted on 18th June 2019 by Phil Ainley MCIM CMktr
Want to escape the humdrum of permanent employment? Then contracting could be for you.
One of the biggest draws to contracting is the chance to escape the shackles of employment and forge your own pathway for your career and make your own decisions.
Here is a quick overview of the contractor insurance policies available to you:
Professional Indemnity Insurance
PI provides cover if your end-client claims compensation against you for any mistakes or negligence on your part that has resulted in the client suffering a financial loss. PI is especially important for professionals offering advice or designs to their clients.
Public Liability Insurance
PL insurance will provide cover if something you do causes injury or other loss to a colleague or a member of the public. Examples could include a visitor to your business premises tripping on a mat and suffering an injury. Or yourself working at a client’s premises and spilling a drink on a computer resulting in them pursuing compensation for any repair costs incurred.
Employer’s Liability Insurance
If you employ one or more members of staff, you are required by law to carry a minimum £5m employer’s liability insurance policy, unless you are in the minority that are exempt.
As a contractor you will find this policy is held by the Umbrella Company you are registered under. EL covers injuries you suffer due to your employer’s negligence whilst you are at work.
Tax Enquiry and Legal Expenses Cover and IR35 Contract Review
Legal expenses insurance with provide contractors with cover up to £100,000 (any one claim) for costs incurred due to a legal investigation. It is a relatively inexpensive cover at only £75.00 and can be complemented with a Contract Review for only £60.00 per contract.
A Contract Review will provide contractors with clarity about their taxation position in the eyes of HMRC. Legal expenses cover and contract reviews are the ideal products for those concerned about IR35.
Personal Accident & Sickness Cover
As a contractor, if you are unable to work for a long period of time you become financially vulnerable. Personal accident and sickness cover usually pays out a weekly benefit to the insured person while they recover. A lump sum may also be paid out in some serious cases of illness or injury.
A lot of contractors work offshore or in continental Europe. Business travel can be included as an extension to a personal accident and sickness policy. It will assist in the event your business flight is cancelled or your luggage lost in transit or if you fall ill while on a business trip abroad.
What exemptions are there to my contractor insurance policy?
Different insurance policies will have different exemptions, including the country you work in, the type of work you do and in which industry you work, and any pre-existing health problems you may have. It is a good idea to speak to your broker first to fully understand which policy is best for you.
Why do so many contractors choose Caunce O’Hara for their insurance? It’s because we care.
For over 25 years we have been insurance freelancers and contractors with bespoke policies to meet their needs. We never oversell policies that you don’t need nor will we leave you underinsured, so you can gain peace of mind that we’ve got you covered.
Should you need to make a claim, Caunce O’Hara have its own in-house claims team who are specialists at helping our clients by ensuring the claims process is a smooth and trouble-free as possible.
Call our friendly and award-winning team for a contractor insurance quote today on 0333 321 1403
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