Contractors' insurance cover
There are many different types of insurance for contractors - find out which policies work for your business.
Find the right kind of cover for you
While there is no ‘one-size-fits-all’ contractor insurance policy, a lot of contract workers choose to take out employer’s liability insurance. This type of insurance is required by law if you own a company, the only exception to this is if you are the sole owner/employee.
Any additional insurance contractors need depends entirely on the type of work and nature of their clients. Contractor public liability insurance can often be purchased alongside employer’s liability and protects contractors from claims made by a third party. Limited Company owners often opt for a contractor insurance package to optimally protect themselves. Public sector clients increasingly require contractors’ indemnity insurance coverage, which covers you for any negligence claim brought against your business.
If you’re affiliated with an umbrella company, their umbrella insurance may cover you and is commonly comprised of professional indemnity and public liability insurance for contractors.
You can find out the cost of liability insurance for an independent contractor by searching for it individually or as part of a broader insurance package.
Using our contractor insurance comparison tool will help you determine the most cost-effective level of cover for your needs.
Frequently asked questions
How much does contractors' insurance cost?
There are so many different types of insurance that it’s difficult to estimate how much you’ll pay without looking at the particularities of your contracting business. Quotes for limited company insurance for instance, can differ quite dramatically.
How much will a public liability insurance policy cost?
The cost of public liability insurance for contractors depends broadly on four things:
Inevitably, the cost of something like UK public liability insurance is affected by the kind of work that you do. If your contract work involves working with dangerous machinery then you’ll pay more than someone who’s largely desk-bound.
Your company’s annual turnover
The larger your turnover, the more likely it is that your contractor liability insurance premium will be higher.
Your claims history
Cheap public liability insurance will be most readily available to those who have never had cause to make a claim.
Potential liability for public injury
If you work in a profession where there’s a lot of public footfall, then the chances of an accident occurring are increased, which will increase your premium.
How much will a professional indemnity (PI) policy cost?
The cost of an indemnity insurance policy is well worth the professional protection you receive. This is especially true if you work in an industry where clients are likely to take action against you if you make a mistake that costs them money. The price of the insurance you take out will depend on the following factors:
The needs of your client
Some clients make contractor indemnity insurance mandatory. If this is the case, they will name a minimum amount of cover.
The requirements of any professional body
Often the conditions of such a membership include a requirement for indemnity insurance – if this is true for you it’s worth contacting them and asking what level of professional indemnity insurance you need.
Your personal assessment
If a client successfully sued you for lost profits or damages, you need to be sure your insurance would cover the sum total – the cheapest public liability insurance might not be a bargain if you find yourself in court.
What insurance does a contractor need?
Unless you own a limited company, insurance is an optional expenditure, but as you will see, it is regarded by most industries as an essential part of running a contracting business.
Do I need public liability insurance?
In the UK, liability insurance (also known as PLI or third party liability insurance) is not a legal necessity but all umbrella companies do require their employees to be PLI policyholders. Many independent contractors also choose to take out PLI, especially if they travel to a client’s premises or use equipment that could cause injury to a member of the public. Increasingly, public-facing clients require their contractors to have a public liability insurance policy, so check with your client as to their minimum requirement.
Do I need professional indemnity insurance?
Professional indemnity insurance is not required by UK law but it does protect you if a client decides to sue you for negligence or damage to their business. Like PLI, professional indemnity insurance is increasingly expected by clients, who expect contractor insurance to be comprehensive. Professional indemnity is a particularly useful form of IT contractor insurance as it protects against liability for common mishaps like equipment failure and data loss.
Do I need employer's insurance?
Under the terms of The Employers’ Liability (Compulsory Insurance) Act 1969, If you own a limited company with one or more employees, you are legally required to take out employers insurance of no less than £5 million. However, if you have one employee only and that employee is a family member and/or owns at least half of the company’s share capital, you are exempt from this law.
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