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If you’re a self-employed contractor or run a contracting business, you’ll be focused on delivering over and above your clients’ expectations.

As careful and professional as you may be, accidents happen. Having the right contractors’ insurance in place is vital to protect your reputation and client relationships.

 

If you’re a self-employed contractor or run a contracting business, you’ll be focused on delivering over and above your clients’ expectations.

As careful and professional as you may be, accidents happen. Having the right contractors’ insurance in place is vital to protect your reputation and client relationships.

 

Written by
Anna McEntee
Insurance comparison expert
Last Updated
17 FEBRUARY 2023
5 min read
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Why do I need contractor insurance?

Working as a contractor is filled with risks. No matter how professional you are, some events are out of your control. Contractor insurance is a safety net to protect you in case of: 

  • Accidental damage – when you work in a trade, there’s plenty of scope for accidents, as well as damage to property or possessions. Contractor insurance can cover you if someone makes a claim against you and you have to pay compensation.
  • Accidental injury – if you’re a contractor working with powerful tools and equipment, for example, you may be held responsible for accidental injuries. The right policy could protect you against compensation claims.
  • Loss of earnings – it’s not just about damages and injury caused to other people. If you find yourself injured and unable to work, contractor insurance could cover you for loss of earnings.

Is contractor insurance a legal requirement? 

Insurance for contractors isn’t a legal requirement, but clients may ask for proof of your insurance before agreeing to work with you.

What types of contractor insurance are available? 

There are three types of liability insurance to think about that could protect you and your business against potential claims:

Public liability insurance

If your work brings you into contact with the public or clients, you might need public liability cover. Public liability insurance covers you if your negligence causes someone an injury or damages their property.

For example, if you’re using tools on-site and a member of the public trips over a lead and hurts themselves, public liability insurance could cover you against personal injury claims. It won’t, however, cover you for faulty workmanship.

Employers’ liability insurance

Employers’ liability insurance is a legal requirement for any business with employees – this includes sub-contractors - unless they are immediate family members. If you're a limited company with multiple directors, you're always legally required to have employers' liability insurance in place. Employer’s liability covers you for negligence claims in case your staff are injured or become ill as a result of their work and hold you responsible.

Professional indemnity insurance

Professional indemnity insurance (PI) covers the cost of legal action or compensation claims if a client claims you breached your professional duties, or made major mistakes or omissions when giving advice or providing design.

For example, if you’re an IT contractor for a software implementation project and it fails as a result of your work, you could be held liable. The same applies if you’re a professional – an accountant or solicitor, for example – and a client sues you for giving incorrect advice.

How can I reduce the risk of a claim against me as a contractor? 

Your first step should be to head off problems before they occur. Here are some ways you can reduce the risk of legal action:

Always check the contract
Read every clause to make sure you’re happy and don’t sign if you’re not. Keep copies of all your contracts.

Make sure deliverables are clear
Some projects might start with deliverables that aren’t properly outlined. As a contractor responsible for delivery, you need to confirm exactly what you’re required to produce and when. Communication is key.

Set milestones and signoffs
On bigger projects, break down the work into smaller chunks and insist your client signs off on these once they’re happy. Keep copies of these approvals.

Make notes of meeting outcomes
Keep your own notes and minutes of any contact with your client. Keep an eye out for issues that might affect your ability to deliver and address these over email.

Agree things by email
You may get on well with your client and trust them when they tell you to ‘just get on with it’. That’s fine, but insist on confirming by email. A paper trail is a helpful way to prove you’ve done what was asked of you.

Finally, take out the right insurance to make sure you and your business are protected.

Compare prices and get insurance

Finding competitive liability insurance is easy. In fact, you can do it right here, right now. Use our public liability or employers’ liability comparison services, or complete the professional indemnity enquiry form to find the right deal for you.

Protect your business with comprehensive liability insurance cover. Compare with us today.

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Anna McEntee - Insurance comparison expert

Anna’s all about delivering fantastic insurance products at a great price. Value is the most important thing for Anna, as she cuts through the jargon and finds what’s most important and worth your hard-earned money.

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