As a contractor, it’s really important that you protect yourself and your limited company with the correct business insurance.
You’ll usually need valid business insurance as part of the contracts that you agree with agencies or clients. This might be something that you haven’t put much thought into before, but as the director of your own limited company, it’s important that you check the contractual requirements so that your insurance meets the demands of each assignment.
But what types of insurance policies will you need to take out? Here’s a quick rundown:
Employers’ liability insurance
This isn’t mandatory if you’re the sole director and hold 50% or more of the share capital in the company. However, if you’re going to employ anyone, you’re legally required to have a valid policy.
As the director of a limited company, you’re responsible for the health and safety of your employees while they’re at work – lots to think about we know. In the unfortunate event that an employee suffers an accident or injury in the workplace – something we hope will never happen - they may bring a claim against your company.
Of course, it’s better to be safe than sorry, so having comprehensive employers’ liability insurance just in case is always a good idea.
Public liability insurance
Public liability insurance covers against claims made by members of the public for accidental injury or damage to property in the course of your business activity. Slips and trips are the most common claims.
This type of cover is invaluable if you deal directly with members of the public, have clients that visit your office, or if you (or any of your employees) visit a client’s site.
Professional indemnity insurance
Professional indemnity insurance, or PI insurance, covers the expense of defending a claim brought against your limited company by a client, as well as any compensation that’s paid out. It provides cover against a range of things including negligence, mistakes, loss of documents or data, breach of contract and unintentional breach of copyright and/or confidentiality.
Run-off cover, an add-on of PI Insurance, is another common requirement of the client or agency. This protects your limited company against any claims after your assignment has ended.
Even if you had valid professional indemnity cover during your project, the client could still lodge a claim several years down the line. With this in mind, having run-off cover is essential if you want to stay protected.
How can ClearSky Contractor Accounting help?
At ClearSky Contractor Accounting, we understand that finding insurance policies might not be top of your list of priorities as a busy contractor. That’s why we’ve teamed up with a business insurance specialist to develop a package up to £17 million that’s tailored exclusively to limited companies.
In addition, we offer some clients the following coverage as standard – depending on the package they choose. This is just another example of how we’re with you all the way:
- £10 million employers’ liability insurance
- Up to £5 million public liability insurance
- Up to £2 million professional indemnity insurance
To compare the packages we offer, please click here.
*Clearsky Contractor Accounting Ltd is an Appointed Representative of Jelf Insurance Brokers Ltd who is authorised and regulated by the Financial Conduct Authority (FCA).