There is no doubt that the advantages of contracting far outweigh any negatives – you have more control and flexibility, as well as the opportunity to earn more than a permanent worker in the same role, so it’s no surprise that there are now more people than ever before becoming self-employed in the UK.
However, working for yourself will mean that there will be more responsibility, such as looking at taking out certain insurances to protect you and your business.
There are a number of insurances that a contractor will need to take into consideration, for example:
- Employer’s Liability Insurance– Employers Liability (EL) Insurance is there to protect your business by helping to pay out compensation should an employee become ill or injured from carrying out duties in the workplace, for which you as the Employer are responsible.
It is a legal requirement for any business with members of staff to have this type of insurance and you must take it out as soon as you set up your business. Your policy must cover you for at least £5 million and come from an authorised insurer
- Public Liability Insurance– It is worth looking at taking out this type of insurance should you have members of the public visiting your site, employees visiting your client’s premises or contractors working for you.
You have a duty to protect anyone who may be affected by your activities so therefore, if an accident occurs and it is your or your employee’s fault, then a client or member of the public can make a claim against your business, in which case Public Liability Insurance would help with any damages.
- Personal Accident Insurance– This type of insurance could help if you or your employees are injured by providing either a weekly or lump sum benefit to your business, during the period off employment.
- Cyber and Data Risks Insurance– With cyber security becoming more and more important for businesses of all sizes, this type of insurance can help when it comes to protecting your company from either hackers or data breaches.
PROFESSIONAL INDEMNITY INSURANCE
Professional Indemnity Insurance, or PI, is a type of insurance that helps to protect you from any claims that may be brought against you by a client.
Typical examples of why a client may make a claim against you includes:
- Raising an issue with any work you have carried out for them.
- Loss of documents or data.
- Errors or omissions.
Reasons as to why you may need to take out this type of insurance would be if you:
- Provide expertise, skills or advice to clients.
- Provide a professional service that could be challenged by a client.
- Have access to a client’s confidential information.
- Produce materials that could cause offence or violate intellectual property rights.
If any of these points ring true for your business and the services it provides, although you may feel confident in the quality of your work, you could still be vulnerable to such claims, making PI insurance a necessity for your company.
There will be many factors to take into consideration when it comes to how much PI insurance will cost you, for example your industry, the type of work you do and the level of cover you want will all play a part in the overall costs.
Shop around and look for quotes from different companies so that you can compare and see which provider you can get the best deal from for everything you need. Your accountant might also be able to give you further advice and guidance on the subject.
Exclusive discount code
As a client of Dolan Accountancy you will benefit for an exclusive discount of 10% when you purchase your insurance through Kingsbridge, this discount will also carry through if you choose to renew your insurance with them after the first year
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Disclaimer
Dolan Accountancy is an Introducer Appointed Representative for general insurance purposes only of Kingsbridge Risk Solutions. Kingsbridge Contractor Insurance is a trading name of Kingsbridge Risk Solutions Ltd. Authorised and regulated by the Financial Conduct Authority. Registered in England No. 4122238
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