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Contractor Insurance

Many individuals having flown the nest of employment to experience the highs of contracting rarely look back, or harbour any regrets.  


This really comes as no surprise, as the renowned enticements of the profession include considerably better pay, considerably less tax, and a much freer, autonomous way of working.


Having said this, it’s widely acknowledged that contracting is riddled with potential challenges, with problematic hurdles sporadically presenting themselves for all contractors to overcome at one point or another in their career.  


It therefore makes sense for a contractor to put as many precautions in place to ensure they are as compliant and protected as possible.


Perhaps the easiest and most robust way of doing so is for a contractor is to ensure they have the relevant insurance policies in place.


The internet is the home of many relevant platforms offering various insurance policies for the benefit of contractors, but there are several main ones that necessitate due consideration.  


Professional Indemnity Insurance


Professional Indemnity insurance is most commonly a stipulation in standard contracts used by most agencies. This policy will react in circumstances where an error or omission in a contractor’s services causes, or is alleged to have caused, a third party a financial loss. As contractors are recognised as one of the most independent professional parties, they are completely responsible for their actions and resulting implications. As a result, this policy is one of the most commonly purchased insurances, serving as a comprehensive safety net should a contractor make a mistake in their work.


Public and Employers Liability Insurance


Public and Employers Liability Insurance will protect an individual against claims where injury or death has been suffered by third parties or employees, and claims where they are alleged to be responsible for damage to third party property. Employers’ Liability is compulsory for any business that has one or more employees, and whilst Public Liability is not a legal requirement as such, it is a common stipulation of a contract, especially for offshore workers.


IR35 Insurance


As IR35 enquiries are evidently rising after HMRC’s promise of further clamp-downs, more and more contractors are seeking protection in the form of IR35 insurance. There is a range of cover for this issue, some policies offering to deal with the enquiry on a contractor’s behalf, or more comprehensive policies guaranteeing complete cover for an enquiry, including penalties if a contractor is deemed to be inside IR35.


Jury Service Protection


As mentioned, the freedom that compliments a contracting profession also bestows a few issues. One of these includes being summoned for jury duty. The thought of having to take an unknown amount of time out of work for a contractor is extremely undesirable, as they will completely lose out on all pay with no reimbursements that employees would benefit from. Therefore, insurance policies to cover this situation are also popular amongst contractors, as they can help offset the loss of income associated with Jury Service.  


Sickness Cover


Similarly, contractors would also certainly lose out if they were to fall ill. Contractors do not benefit from the privilege of any sick pay, therefore will simply lose out on their pay, or even their contract, if they were to take a long period of time off. There are accident and sickness insurance policies designed specifically for contractors, which offer financial security should their ability to work be affected by illness or injury.

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