Insurances are there to protect you from unforeseen circumstances that could have a detrimental effect on your business and how it carries out its work.
Accidents and incidents could very well result in your business not being able to run as smoothly as usual, which could mean not being able to carry out work or having to cover damages or rectifications.
Therefore as a contractor, there are a number of different insurances you may need to consider:
PROFESSIONAL INDEMNITY INSURANCE
Ideal for protecting you from any claims that are brought against your company by a client, Professional Indemnity Insurance is vital for contractors who give out advice or designs.
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 and omissions
EMPLOYERS LIABILITY INSURANCE
It is a legal requirement for any business that hires staff to have Employers Liability (EL) Insurance and you must have it in place as soon as you start your business.
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.
Your policy must cover you for at least £5 million and come from an authorised insurer; you can be fined as much as £2,500 for every day that you are not properly insured.
You also need to be aware that you could face a £1,000 penalty if you do not display your EL certificate in your place of work or refuse to make it available to inspectors when asked.