Contractors and freelancers provide professional advice and services to a wide variety of clients and as such they may well be liable for any mistakes or errors they may make in the course of their duties.
As a result, many contractors take out insurance cover just in case something goes wrong. In some cases, clients will insist that a contractor is covered by a professional indemnity policy before hiring.
Contractor insurance quotes are very competitive these days – you can get an instant online quote for a variety of policies with a wide range of business insurance providers.
Professional indemnity (PI) cover
This covers contractors against claims for negligence, unintentional breaches of intellectual property, loss of data or documents and claims for dishonesty.
Clearly, the risks a contractor faces will depend on his area of expertise (i.e. – is he an IT contractor, a management consultant, etc). Typically, specialist insurers will provide PI policies tailor made to the area you specialise in.
Employers’ liability cover
This type of policy will cover any ’employees’ you may have within your company for any injury sustained at work. Employers are obliged to carry this type of cover by law.
Even if you are the sole ’employee’ of your limited company, you still should take out employers liability insurance. The legal minimum level of cover is £5 million, but many insurers provide £10 million as standard.
There are a few very specific instances where your business may be exempt from the legal requirement to have an employers liability insurance policy in place. To find out more read our guide, What is employers liability insurance, and is my business legally required to have cover?
Public liability cover
This type of cover is also known as ‘general’ liability insurance and will cover your company against third party claims.
An example of such a claim would be if someone visits your office and falls over a computer cable. It will also cover you if you accidentally damage property at a client site.
Other types of business insurance
ByteStart has a series of practical guides to help you get to grips with the various types of business insurance, including;