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Business insurance – some FAQs

Why is business insurance so crucial?

Many professionals who choose to operate as a contractor or freelancer through their own limited companies question the need to buy business insurance.  It may seem an unnecessary expense but it’s vital that you don’t overlook the impact that not being adequately insured could have on both you and your business. 

Why do I need insurance?

To begin with, you may not even be awarded a contract without the relevant insurance in place as many recruitment companies such as Project Resource make it a contractual requirement.

A responsible employer will want contractors to protect themselves and their clients against any issues that might arise from them doing their jobs. Mistakes do happen and if a member of the public was injured on your business premises or as a result of your work you could face a costly claim.  In such a situation, having appropriate insurance in place to pay a claim could be what keeps you in business.

What insurances do I actually need?

The requirements from employers can vary so check your terms to find out what types of insurance and what levels of cover are required.  In terms of you and your business, you’ll need to consider all of the following: 

Professional indemnity (often referred to as PI) relates to claims that could result from any mistakes you make while you’re doing your job.  If you’re negligent, make an error or omission, or give bad advice and your client loses money as a result, professional indemnity insurance provides cover for legal defence costs and damages awarded against you. 

Public liability (or PL) provides cover if someone is injured or property is damaged as a result of your actions while carrying out your job. Whether you are on your own premises or at a client’s site, you have a duty to protect anyone who might be affected by your activities. If you fail to do this, you may have to pay substantial compensation.

Employer’s liability provides protection against claims from employees for injury or disease relating to work. It is compulsory for almost all UK businesses, so if you need to comply with a standardised contract, your client may insist on it – whatever your set-up.

This article was supplied by Kingsbridge Contractor Insurance – A specialist insurance broker for freelancers and contractors. They offer a number of comprehensive insurance packages designed specifically for contractors, where cover can be arranged online in minutes with policy documents instantly sent out electronically.

To gain a quotation please visit http://shipshape.kingsbridge.co.uk or please call 01242 808 740 to speak to one of their advisers.