Insurance can often be a difficult topic to get your head around and understand if you have adequate cover for the job you are doing. Most people will have an insurance cover with the hope to never use it. However, if you were to need it, having the right insurance is extremely beneficial, especially in the unfortunate circumstance of a large claim being brought against you.
This blog will explain the main benefits of having the right insurance cover.
You are financially protected
If your actions lead to damages or injuries, it may result in a costly claim being made against you. Likewise, in the unlikely event that your work leads to the loss of money through negligence, omission or bad advice, the client may bring a claim against you.
In such situations, having the right insurance in place could be what keeps you in business. To ensure that your business is protected financially and that you are complying with the requirements of your client, it is advised that all limited company contractors always have suitable insurance in place.
Makes you more employable
As a contractor it is your responsibility to make sure you are covered, having the right insurance policy will give you piece of mind, and will allow you to do the job you set out to do. Making sure you are in line with terms of your contractual agreement is of the upmost importance, while it will also help demonstrate that you are a professional and compliant contractor.
Clients and recruitment agencies, like RED10, are requiring contractors to have the right insurance in place. Therefore, being covered opens up more contracting opportunities for you.
A relatively small overall cost
Contractors mainly take out insurance as it lowers the risk of incurring high costs if claims are made against you. The insurance premium is not likely to be high, especially if you don’t have any prior claims against you. Having the right insurance cover in place before the start of any project is crucial as it acts as a safety net.
Insurance acts as an IR35 indicator
Holding an insurance cover is a great IR35 indicator, it can also reflect you as a credible business. The main difference between employees and having your own limited business is the need for your own insurance cover. Having insurance shows you are operating as a legitimate business as well as taking commercial risk and taking financial responsibility.
What types of cover should contractors consider?
Professional indemnity – covers you if you are accused of professional negligence, making an error or omission, or giving bad advice which results in your client losing money. This provides cover for legal defence costs and damages awarded against you.
Public liability – provides cover if someone is injured or property is damaged as a result of your actions whilst supplying services. 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.
Employers’ liability – provides protection against claims from employees. It is compulsory for almost all UK businesses. Regardless of your set-up, this is often insisted upon by clients who may require you to comply with a standardised contract.
What does RED10 recommend?
RED10 require contractors to secure no less than £1,000,000 Professional Indemnity insurance and £1,000,000 Public Liability insurance, alongside any other industry-specific insurance at all times.
Where can contractors buy the right insurance?
There are a limited number of insurance providers that offer cost effective and comprehensive insurance to the contracting community.
RED10’s partnered with Kingsbridge, a specialist insurance broker for contractors.
Kingsbridge provide a package which includes all the key insurances you may need – professional indemnity, public liability and employers’ liability. This means you only need one policy to cover your main exposures and meet your contractual obligations.
Some of the key benefits that the Kingsbridge package can provide are, cover for previous work, instant access to policy documents, personal accident cover as standard, monthly payment options and more.
It is important to speak with an insurance specialist, like Kingsbridge, that understands the risks contractors face and can tailor insurance for your personal needs. For more information please get in touch with Kingsbridge directly to discuss your business insurance arrangements.
Call: 01242 808 740