Orange & Gold Blog

Do contractors need their own insurance cover?

If you are contracting through a limited company, your company is responsible for the work you do and any advice you provide. It is likely that everything will run smoothly but if something goes wrong with the services you provide, or your client is not happy that you have given the correct professional advice, they may try to claim the costs incurred from your company.

Therefore, it is better to be safe and make sure you are covered by insurance for the sorts of claims that can arise. The three main types of business insurance are:

Professional Indemnity Insurance: protects you against claims from your client that you provided defective or substandard services or advice and resulting costs. These days, many clients insist contractor have this type of insurance in place before they will enter an agreement.

Public Liability Insurance: protects you against claims arising from any damage or injury caused by you or your staff, while working. This is particularly recommended if you are visiting or working at your client’s premises.

Employer’s Liability Insurance: protects you against any claims from employees as a result of working for the company and a legal requirement if you have employees.

We are able to provide support packages that include all of these key insurances, as well as tax investigation insurance, which will cover any fees associated with handling an investigation by HMRC. Other insurances to consider as a self-employed individual are office contents insurance, key man insurance, directors’ share protection, as well as life assurance and critical illness / accident / permanent health insurance.

NB. If you are working through an umbrella company, the provider should hold the necessary insurances on your behalf.