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Everything you need to know to have the correct insurance cover
At some point in your contracting career, things will go wrong
Did you know that the buck stops with you?
It’s up to you to make sure that your mistakes are put right and if you don’t all can’t the client has a legal right to claim for any financial losses that are made as a result of your mistake. Now if this unfortunate situation does arise it wouldn’t take long for a very expensive and possibly crippling legal bill to land on your desk. So some clever insurance people came up with a number of contractor insurance products that are tailored the contractor is freelancer
The first product that you must have as a contractor is professional indemnity insurance
Professional indemnity insurance
Pii one of those essential pieces insurance that allows you to enter a new contract with confidence. Is designed to protect you and cover the costs arriving arising defending claims for any damages that may be brought against you during your contract. While this may all sound a little scary it’s not very often that mistakes can’t be fixed or an agreement reached before the claim is made. One of the most common claims their clients make against contractors is breach of contract now this could be an unintentional breach and may not be 100% your fault the client is still able to raise a claim against you so it’s better to be covered then go through all the stress and the expense of defending yourself and your work
The other risks that are covered under professional indemnity insurance are any intellectual property rights infringements. The loss of any documents or data during the contract this includes theft and damage. It will also cover you for any claims your client brings up stating that you failed to provide the service or product that you are contracted for. These are a few of the main areas that PI insurance will cover but it’s important to region insurance documents to get a full understanding of what it covers. This piece of insurance has become so important that most clients and agency will not take on insurance don’t have this insurance in place.
But what level of cover do you require?
Ideally, you should be looking at a policy that covers you for between five and £10 million and tried to find one that is specifically targeted for your industry. An IT contract is not going to need the same level of cover as an oil and gas engineer.
The next piece of insurance that contract is should have is public liability insurance.
Public Liability Insurance
Most contractors will be working on site or in an office so they will be dealing with the public or other employees at some point in their day-to-day activities. Now, these simple interactions don’t normally have any cause for concern but if something happens that causes injury in damages to that person you and your business are liable. Most contractors will, of course, wonder whether they need it or not as they may view themselves as not operating in the same way as most businesses. But despite working alone his contract is the same rules apply to you if someone is hurt as a result of your activities you are liable for compensation.
So what level of cover do you need is a contractor?
Once again this will come down to what industry you are working and that at a minimum you need to be aiming for a least £5 million cover. As with professional indemnity insurance public liability insurance is expected from employers and agencies. So by not having it could be hampering your ability to land new contracts
The last piece of insurance that we considered to be essential when contracting is tax insurance or commonly known as IR35 insurance.
This policy will cover you against all the hassles and problems and satiated with a tax investigation from HMRC. Most insurance policies will cover you against IR35 VAT disputes and any other investigations that may be brought against you. There are a number of decks insurance products on the market and they range in price from as low as £100 up to £1000 per annum.