As a contractor, one of the things you will need to have in place to run your business effectively is appropriate insurance. There are many types of insurance aimed at contractors, freelancers and small businesses, so it is worth considering the options available to ascertain whether they are relevant to your work.
Working in certain sectors can mean that you are regularly relied upon to provide services which could leave you vulnerable to a claim being made against you. For example if you are responsible for a client’s data or the personal safety of those around you. Certain sectors may require contractors to have insurance in place before they take them on, and it is always best to ensure that you are appropriately covered in case you are pursued by a client.
There are several different types of insurance that can help you to minimise the risks to which you are exposed, some of these are detailed below.
Professional Indemnity Insurance
If you complete work for a client who claims that they have suffered financial hardship as a result of a mistake or omission on your part, then you could be liable for any costs incurred. A professional indemnity insurance policy can cover you for the cost of any payout that you might need to make, cover any legal costs you could be liable for and protect you from other costs arising as a result of mistakes in your work.
In some sectors it is a standard requirement of being hired that you have professional indemnity insurance in place before you begin work, particularly industries which rely heavily on technology and data processing for their income. A small mistake made by a programmer could result in huge financial losses for their client, and neither the business nor the contractor wants to be left in a position where these costs have to be met by the individual.
For some self-employed individuals, retrospective personal indemnity policies can cover work completed before the policy is in effect, meaning that you can change providers without any break in cover for past contracts and have total peace of mind.
Anyone who has employees will know that protecting their health and ensuring that you have adequate cover in case of an accident is a priority. If someone gets hurt in your workplace, whether that’s in the course of them carrying out their job or as a result of their environment or working conditions, being covered against any claim is important. This is a legal obligation, although levels of cover may differ, so picking one which will cover any eventuality is always recommended.
If someone suffers from injury or illness whilst on your business premises, or as a result of an accident or oversight in the course of your operations, there could be a claim made against your business. From small incidents such as accidentally damaging a client’s property whilst they are visiting your premises to serious injuries caused by tripping or falling on site, you could be liable for any costs incurred by the injured party.
Wherever you work, from the kitchen table to purpose-built premises, the cost of your workspace being unavailable could be immeasurable. From a damaged laptop to a complete loss of all equipment and premises, proper cover for your place of work and all its contents is the best way to protect yourself against unforeseen circumstances. Appropriate cover can include a range of options which might be relevant to you including legal cover and a payout for any interruption in your business.
If your business relies on key members of staff, including you or any of your work force, then any illness or injury which prevents an essential team member from being able to work could be detrimental to your business. Personal accident insurance could provide a weekly sum to cover the costs of replacing or covering for a missing member of staff, and a lump sum if the person in question is permanently incapacitated or dies. Insurance of this kind can be invaluable to businesses where the owner is the sole earner in their family or if the success of the company relies on one person’s expertise.
Many small businesses are entirely dependent on being able to access the internet, email and any other technology to function. A business that relies on a website or has an online ordering system which is the primary purchase method could lose money if they are subjected to a virus, online attack, ID theft or other service outage. Insurance could provide a payout to cover any loss of business in the event that you are unable to trade due to technological issues.
Many small business owners take on staff as a matter of necessity and are not always fully versed in the relevant laws or the statutory requirements for an employer. It is important to ensure that you have systems in place to protect yourself, your employees and ensure that you are meeting your legal responsibilities. Insurance policies often come with additional options to include HR advice and support to ensure that you are fulfilling your obligations as an employer.