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| Insurance
for contractors |
Various
insurance policies are available to protect your limited company
in the event of an accident at work, or claims against you for errors,
omissions or negligence, amongst others. You may be providing professional
advice which is relied upon by your agencies and clients. Consequently
if mistakes are made in your work you may have a direct financial
responsibility to your client for such errors. Whilst the possibility
may be considered remote, it does happen. Increasingly, with the
use of 'IR35-friendly' contracts, many clients are insisting on
evidence of professional indemnity insurance.
Having appropriate protection will prove to your clients that you
are professional in your approach and will help in obtaining future
work. Although mistakes are rare, these policies are now reasonably
priced and will also provide peace of mind. |
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Professional
Indemnity Insurance |
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| Provides
financial protection for your company and is designed to meet the
cost of defending claims made against you, including damages that
may become payable. Claims can occur where a client suffers a financial
loss as a result of alleged mistakes or omissions on your part.
You may even be sued by a client who is merely dissatisfied, but
has no valid claim, leading to substantial legal costs and time
away from contracts. Of course, such claims are rare, but it makes
good commercial sense to protect your company against such claims,
and this can also assist in demonstrating being 'in business on
your own account' for IR35 purposes. |
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IR35
Tax-Safe Insurance |
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| This
insurance provides complete IR35 peace of mind, as it covers
legal
costs, expenses and accountants fees to represent you in an in-depth
IR35 investigation by the Inland Revenue, and also covers ALL
ADDITIONAL
TAX, NICs, INTEREST AND PENALTIES. |
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Public
Liability |
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| This
type of policy will protect liability arising where you accidentally
cause damage or loss to someone else's property (Examples: Coffee
down the back of the computer or over the keyboard, knocking a
laptop or other piece of IT equipment off a desk etc). Also, if
you accidentally cause injury to someone whilst working at a client’s
premises (Examples: You have cables running from various machines
to a PC you are working on and someone does not notice and trips
over and injures themselves). |
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Employer's
Liability |
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| This
insurance is arranged to protect employers against claims for
injury or illness brought by employees. Employers' Liability (Compulsory
Insurance) Act 1998 requires that employers maintain cover to
a minimum of £5,000,000 in respect of such claims. Many
contractors don't take out this type of policy (since they will
be claiming against their own Limited Companies!) - but it is
a statutory requirement. |
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Equipment
Cover |
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| You
should be looking to cover the replacement costs (and subsequent
disruption compensation) of the loss of your business assets
such
as computers, faxes, printers, books, desks, telephones, etc.
Many liability policies allow for this to be added cheaply
and
can be arranged as 'all risks' (loss, accidental damage and theft).
It is also useful for IR35 purposes
in demonstrating to the Inland Revenue that you are professionally
protecting your business viability. |
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Legal
Expenses |
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| You
are being exposed to new regulations and legislation such as
IR35
and also a changing landscape in demand for contractors, that
means many fringe agencies are under threat, owing contractors
many thousands of pounds in unpaid invoices. Up to now the
costs
involved in bringing a claim have proved to be a deterrent. Yet
failure to do so can be equally, if not more costly and disastrous. |
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