Take Cover: Why Insurance is a Must for Contractors

Contractor Insurance

Contractor insurance experts Kingsbridge give us the benefit of their experience

Insurance is one of those things in life that we don’t realise we need until it’s too late. Here at Kingsbridge we’ve lost count of the number of times we’ve spoken to a customer who put off purchasing cover, or didn’t renew an existing policy, only to find themselves in a situation where a claim was being made against them.

The argument is a familiar one. What’s the point in purchasing insurance or renewing a policy when you don’t need one? After all, it’ll never happen to you. You’re good at what you do. You don’t make mistakes. You’re a specialist. But it still happens – and more often than you’d think.

Having the right insurance in place can make a huge difference. When a claim is made against you, whether it’s right or wrong, you have little choice but to defend it. With a policy in place to fight your corner and cover your costs, you’re free to carry on with your work.

Without that buffer you’re likely to be caught up in a financial and legal quagmire, losing both time and money as you seek to defend yourself. Furthermore, if you’ve been placed in a role through a particular client or agency, you run the risk of leaving them open to claims too. That’s why you’ll often find that having cover in place is a requirement before being placed into a role.

Beyond the obvious financial and legal benefits, having cover in place provides something invaluable – peace of mind. Any mistake that you make in the course of work, even if it’s no more than an accusation against you, can be extremely expensive. You wouldn’t travel in a car without a seatbelt or ride a motorbike without a helmet. Having insurance as a contractor is no different.

The vast majority of claims are made against three types of insurance in particular – Professional Indemnity (PI), Public Liability (PL), and Personal Accident Cover (PA).

PI will cover you against claims for negligence – making a mistake, for example, or giving bad advice. Alongside that you’ll also be protected against a breach of intellectual property, loss of data, and loss of documents (amongst other things.) PI also acts as a key IR35 indicator and will almost always be insisted upon by agencies and clients.

PL is essential for any contractors who are responsible for anyone who could be affected by their actions. It provides cover for damage to third party property or injury to third party persons, as well as covering any legal fees that might arise as a consequence of any claims they have to defend.

Even if a contract doesn’t expressly stipulate that PL is required, it’s a still a very good idea for contractors to hold it as it’ll mitigate any risks they might face.

Of all the elements that make up our standard package of insurance at Kingsbridge, PA is the most claimed upon. Whilst a regular, salaried employee would generally be protected by their place of work, contractors rarely have such safety nets in place. If an injury were to occur whilst you were on a job and you’re left unable to work then there’s a good chance you’ll be looking at a significant financial loss (not to mention the likely loss of your current contract.)

With PA in place you’ll receive a weekly benefit whilst you recuperate, or a lump sum should the accident result in permanent disability or death. Having PA in place means you won’t have to worry about your bills, the weekly shop, the mortgage or any of the other things you might take for granted when you’re working and earning money.

Want to know more about the benefits of holding insurance? Get in touch with Kingsbridge on 01242 808740, or via email at joey@kingsbridge.co.u

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