What Insurances Do I Need When Working as a Professional Contractor or Consultant?
It can be difficult to understand what insurances you need, and with so many options out there choosing the right policy for you can be a difficult task. So, what exactly do you need as a professional freelancer?
There are lots of views on what insurance you need and there are broadly three reasons as to why you should protect your business and yourself as a professional freelancer/consultant/contractor.
1. The Law
2. Contractual Obligations
3. Protecting Yourself
1. The Law
Aside from third party motor insurance the only insurance that you are required to hold by law in the UK is Employers Liability. This provides legal liability cover for you in the event that your employees suffer injury as a result of their activities. A limited company employing only its director, who also owns 50% or more of the share capital, is exempt from Employers Liability legislation. If this applies to you then the law does not require you to hold any insurance. It is worth keeping up-to-date with legislation amendments in case there are changes to the law or your enterprise which require you to hold Employers Liability insurance.
2. Contractual Obligations
We understand that there is an increasing trend for contract conditions to insist that you hold certain insurance covers, usually Professional Indemnity, Public Liability and Employers Liability. Failure to provide this cover could lead to you being prevented from working as you may be in breach of contract.
This is quickly becoming more relevant as recruitment agencies are requesting that their clients source their own insurance and provide proof of cover before placements begin.
3. Protecting Yourself
If both the law and your contract do not stipulate that you should have insurance cover, it would still be imprudent not to consider buying a policy to protect yourself as an individual. For example, an accidental injury whilst working, or the provision of some advice which is found to be negligent and incorrect can result in a severe financial loss either directly through loss of fees or through defence of a legal challenge. Can you afford not to be protected?
In the majority of cases the true value of insurance is only ever seen when you need to make a claim. Most see it as an unnecessary expense and opt to go without cover. Often the perceived high cost of Professional Indemnity insurance can be a turn off. However, such cover needn't be as expensive as you may think.
Case Study
Some poor advice was misconstrued when Mr Anon was reporting on some project management work. Unfortunately, the advice given made the project over run and resulted in fines for the client. The client claimed on Mr Anon's PI insurance to recoup some of the lost income.
"I was talked into obtaining my own insurance by some of my peers and colleagues who informed me that professionals are often becoming more of a target when things go wrong, especially if it meant that I wouldn't be able to look after my family. Reluctantly, I took out Professional Indemnity cover but was extremely relieved when I had a claim made against me. I am now pleased that I took the decision to find a suitable policy and will continue to protect myself in my working environment." Mr Anon
Recommendations
Kingsbridge Professional Solutions strongly recommend that you check your contract to see if there is a stipulation for you to hold insurance. Even if there isn't a formal requirement, it would be sensible to look at the covers available.
What Do Kingsbridge Professional Solutions Offer?
Kingsbridge take out the hassle of picking the correct policy for you by presenting an all-in-one, comprehensive cover at an extremely competitive premium. Considered as "experts in freelance insurance", Kingsbridge Professional Solutions (KPSol) offer a unique yet affordable, "all inclusive" business insurance package for the professional freelancer, contractor and consultant. Our package provides freelance professionals with an economical solution for personal, financial and job security.
Our online solution is quick and easy to purchase and covers the majority of the main insurance exposures facing professional freelance workers and the like. KPSol has a genuine passion and care for the freelance industry whether for the individual policy holders themselves or the large organisations' that might use the services of freelancer workers.
For more information please visit
Kingsbridge Professional Solutions.
Tel: 0845 643 0061 | E-mail: info@KPSol.co.uk
Posted 02/04/09
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