Insurance: Keeping you in Business
Insurance: Keeping you in Business
Insurance is one of those things you think you don’t need…until you do. One of the most common questions we get asked at Kingsbridge Contractor Insurance is ‘Why do I need insurance?’ We’ve taken some time to explain why.
Your company, your responsibility
If you were a PAYE employee then any accidents, mistakes, or errors you made that caused your company or client to lose money would be covered by your employer’s insurance. However, as an independent contractor you are the company, and are therefore responsible for the services you provide to your client.
If during the course of your work you make an error or omission that results in them losing money, then they are well within their rights to make a claim against you. These claims can often be very costly and in some cases may be the difference between continuing to work and bankruptcy.
It is very likely to be part of your contract
In the vast majority of cases, your recruitment agency will not provide you with cover. In fact, even if you are not asked for it by your agency, it’s still very likely that the terms in your contract will not only state that you must have business insurance, but also the types and level of cover you need to have in place.
The most common type of cover that you will be contractually required to have is professional indemnity, although many agencies will also ask you to have public liability and employer’s liability cover in place as well.
The requirement for employer’s liability can be disconcerting but even if you do not employ anyone else it is important to have this cover in place, especially if you have a substitution clause in your contract. A substitution clause states that if you are unable to complete your work then you are able to hire a qualified replacement to continue in your place. In addition, with a Kingsbridge specialist contractor policy employer’s liability insurance only accounts for a very small portion of the overall price you pay.
In what circumstances would I claim?
Occupational Personal Accident – This is the area that generates the most claims. This will cover you for any injury sustained whilst working and includes working from your home office, a client’s site and travelling to and from work. For example, if you were injured in a car crash on your way to your client’s office and could not work due to your injuries, having occupational personal accident cover in place would be beneficial.
With a Kingsbridge policy we will pay up to £500 a week for up to 52 weeks whilst you recuperate. We also offer up to £100,000 if you die or are left with a permanent disability as a result of your injury.
Professional Indemnity - This covers you for any errors, omissions, bad advice and loss of documents or data. For example, you provide a design to your clients, the project progresses and later on it is discovered that you made an error in your calculations. This causes delays to the project and the client issues a claim against you for the cost of these delays. You would be covered for your legal fees and the compensation paid to your client.
Public Liability – This protects third party property and persons from your actions during the course of your work. For example, you leave your bag in a hallway way at your client’s office, one of their employees trips over it and breaks their arm. You are covered for the legal fees and any compensation resulting from a claim made against you.
Having appropriate insurance in place when a costly claim is made can not only save a lot of distress but potentially prevent you from having to shut your business down, something that could have a negative impact if you want to work as a contractor again in the future.
If you want to talk to Kingsbridge about your insurance requirements please click here to request a callback.