What Insurance Do I Need As A Contractor?

by Guest Author | Dec 6, 2021 | Blog, Ltd Company, Start Out Strong Campaign

Freelancer Insurance – What You Need to Know
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 pathway for your career – making your own decisions.
But when you’re stepping out on your own, you need to make sure you’re protected.

Caunce O’Hara specialises in insurance for contractors, consultants, and freelancers.

Why is Specialist Contractor Insurance Important?

Specialist contractor insurance is designed to protect you against the unforeseen – from making a mistake in a piece of work that results in your client losing money, to personal injury claims from third parties and employees. If a claim is made against you (even if it’s unsubstantiated) and you don’t have cover in place, you could be left to pay thousands of pounds in legal fees and compensation payments out of your own pocket.

What Insurance Should You Consider?

There are several types of cover which you should consider investing in to protect yourself when you’re setting up your own Limited Company:

Professional Indemnity Insurance

Professional indemnity insurance protects you against allegations of mistakes you may make when providing professional services, advice or designs to your client. Many clients will require you to have professional indemnity insurance in place before you can start work.

What could go wrong?

• A project overruns due to a mistake you made during the planning stages. Your client claims against you for the costs they have incurred in the delay.
• Some designs/plans you provided to a client feature incorrect details. Your client claims against you for the cost of putting the mistake right.

Public Liability Insurance
Public liability insurance protects you against allegations of injuring someone in the course of your business or causing damage to third party property. Similar to professional indemnity insurance, most clients will need you to prove you have public liability insurance cover.

What could go wrong?

• A co-worker trips over your laptop cable, breaks their wrist, and is unable to work for several weeks. They claim against you for their lost income.
• You spill a cup of coffee over an expensive laptop owned by your client. They claim against you for the cost of a replacement.
  Employers’ Liability Insurance
  Employers’ liability insurance protects you against allegations of injury (or illness) suffered by employees as a result of their employment with you. Every company that has employees is legally required to hold a minimum of £5m cover.

What could go wrong?

• An employee slips on a spillage and breaks their leg. They claim against you for failing to provide a safe working environment.

What Other Cover Should I Consider?

Tax Enquiry, Legal Expenses Cover & IR35 Contract Review
Legal expenses insurance provides you with cover for a wide range of legal costs, including contract disputes, investigations and employment disputes. It is relatively inexpensive and can be combined with contract review cover which provides you with clarity about your taxation position in the eyes of HMRC. Legal expenses cover and contract reviews are ideal for anyone concerned about IR35.

Personal Accident & Sickness Cover
As a contractor, if you’re unable to work for an extended period, 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.

Travel Insurance
Many 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, your luggage is lost in transit, or if you fall ill while on a business trip abroad.

Other cover to consider
Some contractors may also wish to look into portable equipment insurance, which protects your laptop, smartphone, and other equipment or directors and officers insurance, which protects you against allegations of wrongdoing in your position as the company director/officer.

Are There Exclusions to Contractor Insurance Policies?

Different insurance policies will have different exclusion, based on the country you work in, the type of work you do, the industry you work in, and any pre-existing health problems you may have. It is a good idea to speak to your broker or insurer first to fully understand which policy is best for you.

About Caunce O’Hara:

At Caunce O’Hara, we specialise in insurance for contractors, consultants, and freelancers – giving you the peace of mind that when something doesn’t go to plan, you’re covered.

We’ve been providing contractors and freelancers with specialist insurance policies for over 25 years. We’re trusted by over 30,000 clients in the UK and, should you need to make a claim, we have our own in-house claims team who ensure the claims process is smooth and trouble-free. You can get a tailored quote online today in minutes by clicking here!

This is not a policy document and contains only general descriptions and illustrations. Policyholders must refer to the actual policy issued for the binding terms, conditions and exclusions of cover.