A Guide to Insurance for Contractors
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Anyone who works for themselves could be at risk of law suits and claims from their clients for any mistakes made, accidents that occur or financial losses suffered. Business insurance is an important part of working for yourself as you are ultimately responsible for any mistakes you make, either as a contractor, freelancer or as the owner of a small business.
There is no way to completely eliminate risk from your business dealings, whether that might be a relatively minor incident such as a broken laptop preventing you from completing work on time or a major incident involving a physical injury or wide-scale damage to your business premises.
Unexpected events occur all the time, so taking out insurance to protect you, your business and your income is a wise move and sometimes a legal necessity.
Surveys have repeatedly shown that as many as two thirds of business are uninsured or underinsured, which could have a devastating effect on their finances. There are policies to cover most of the costliest eventualities some of which are detailed below.
Protection for your clients
If you or someone working for you makes a mistake, gives inaccurate advice or costs a client money in another way, professional indemnity insurance will cover the cost of any claims brought against you and includes compensation and legal costs. In some industries and for some clients this coverage is a contractual requirement, so having a policy in place could improve your likelihood of landing new clients.
Protection for members of the public
If someone visits your workplace, or you visit them in theirs, then you might want to consider insurance to cover you in case of any claims for injuries or accidents. You can also include cover for damage to your property or equipment and policies usually pay any legal fees involved in defending a claim.
Protection for your staff
There is a legal requirement for most businesses in the UK with employees to have employers’ liability insurance in place. If one of your staff members falls ill as a result of their work, or has an accident whilst carrying out their duties then the policy will pay out on your behalf.
Protection for your workplace
Whether you work from home or have a dedicated workspace, finding yourself without essential equipment, services or utilities could cost you a lot of money in lost business. With office insurance you can protect the contents of your workplace and the building itself. If you were to include business interruption insurance, then you could also receive a pay-out to compensate for loss of income for periods where you were unable to work.
Protection for your systems
Any business that has internet access could be vulnerable to cyber-attacks, data theft, or any other hacking attempts, which could be costly both in terms of lost time and rectifying the problem itself. A cyber and data risks insurance policy can ensure that you do not lose out if your business suffers from the disruption, which can ensue if your productivity is impaired.
In some industries, certain types of cover are expected from contractors and freelancers, so check whether you might be expected to have cover to protect yourself and your clients, and tailor your cover to suit your needs. For more information on how Nixon Williams can help you with your insurance needs, please call Hiscox on 0845 512 1895 or visit https://www.hiscox.co.uk/nixonwilliams.