Business insurance for IT contractors
Posted: Sep 20, 2017
You probably know already, that running a limited company can be the most effective and financially beneficial way of managing a business. An added generally know benefit is the minimal debt responsibility included with the limited company option. However, do you know there are many more ways you could become financially liable if things go wrong?
There is always a small amount of financial risk implied when operating a limited company. Dependant on the nature of your business and what you offer as a contractor, along with the context surrounding the operation of yourlimited company, unexpected occurrences may appear that possibly may make you liable for damages.
It is crucial to lessen the risk of liability by obtaining business insurance. A massive part of risk mitigation is business insurance, therefore having it in place is a must and it will assist you in reducing the exposure of your business to financial loss and ruining your reputation.
It may be seen as a contractual obligation to get business insurance, and Employer’s Liability Insurance is compulsory for a business that employs staff. A good idea is to risk assess your business and note any exposures that may arise during the course of your limited company’s operation.
Here are some risks that may be included:
- Due to your error or flawed advice, clients are experiencing some issues with the work you have done for them.
- Yourself or your company employees fall injured or ill as a result from work.
- The work you have done or failed to do has resulted in a member of the public becoming injured or causing an accident
- Office equipment has been accidentally lost, stolen or damaged.
- Being inflicted with a personal accident on site that stops you from being able to work.
You may believe you are taking the necessary precautionary steps to avoid the above events, but unexpected events often cannot be dodged. Therefore, having business insurance must be put in place to safeguard your business from loosing income or legal action, as a result putting your mind at rest.
Please see below some frequently used types of business insurance for contractors:
Professional Indemnity Insurance insures you are protected against any allegations against your company. Having this insurance when immediately starting your limited company will save you a lot of time, as many clients and agencies may require and demand that your limited company has this type of insurance in place.
- Public Liability Insurance protects you if someone is harmed or their property is defected during the period of your business activities.
- Employers’ Liability Insurance is obligatory for Directors who have employees, it shields your company from any accusations made by any member of staff. In some circumstances even when you have staff you may not be required to have Employer’s Liability Insurance.
Product Liability, Personal Accident, Directors’ and Officers’ Insurance and more, are all additional types of insurances that would cover you for a range of different circumstances. Generally, the factors dependant on the type of insurance you will need to get will be on your profession and the nature of your contractor business.
Business insurance, whilst it may not be a legal requirement, it could prevent your limited company from being legally chased in the improbable occurrence that something goes wrong. For this reason it’s important to bear in mind the impact and consequences of not using business insurance when setting up your limited company.
Taking care of your business insurance at the commencing of your company will abolish the administrative hassle and give you peace of mind, however you can get this insurance at any stage of running your limited company.
Plenty of contractor accountants promote set insurance packages, these may not inevitably suit your business’s needs. It could be more valuable for you, therefore, to search for an insurance provider that sells particular packages that are personalised to your requirements and profession.
An insurance provider that offers a bespoke contractor insurance package is Custodian, who can enable you to be covered with the exact type of insurance you require, discarding any insurance you don’t need. This then prevents you from paying for insurance you do not need, unlike many generalised insurance packages. Custodian also offers a voluntary Legal Expense Cover, this will cover a wide range of legal expenses if you or your limited company ever occur in a circumstance where legal assistance is needed.
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Growth marketer. Digital strategy consultant. Consulting Audio engineer by background. Digital marketer by choice. Helping freelancers and smart companies being fully digital.