There are many contractors who may well understand the necessity and importance of Professional Indemnity Insurance but still feel uneasy when purchasing such a product. To understand which policies are the rights ones, one must first study the differences between each type of contractor insurance.
Professional Indemnity Insurance (PI Insurance) is considered a freelancer and contractors ‘bread and butter’, and the policy can be purchased from a number of different brokers and insurers. When choosing the right PI Insurance however, contractors should take into consideration the following factors:
– How long the policy lasts (The usual policy lasts for a year and is purchased annually)
– Liability Cost (When purchasing the policy, make sure you chose the correct liability cost depending on the risks that your occupation entails, and potential for error that exists)
– Get the right policy! (It may seem very simple, but many people still purchase either far too much or far too little PI Insurance than they should do)
With these factors in mind, a contractor can tailor a good Professional Indemnity Insurance package around them, as opposed to simply panic buying the first policy they see. Cheap PI Insurance should not be a problem for contractors, as cheap insurance is out there, and it is still quality and recommended. With this in mind, and the factors provided, it is therefore down to a customer to gauge a good PI Insurance policy from their broker or insurance company.
Other popular types of contractor insurance are Tax Liability Cover, an IR35 insurance covering all liabilities, Contractor Sickness Cover, which is a handy life and sickness cover for a contractor, and Jury Service and Legal Protection, which is an insurance covering daily jury service payments plus extensive legal cover. These policies are highly important for any contractor, and alongside PI Insurance, give a successful contractor the levels of protection they require.