The majority of limited company contractors hold at least one – if not more – contractor insurance policies. Whether it’s IR35 insurance, professional indemnity insurance or public liability insurance in this day and age there are a number of policies available to protect you, as a contractor, when running your own business.
But how do you know which insurance you might need? Should you take out PI insurance, tax liability insurance, public liability cover or all of the above? And anyway, is insurance as a contractor even a legal requirement?
The most common contractor insurances held by individuals working through their own limited companies are:
However, there are plenty of other policies that you may want to consider depending on your business, its industry, the services you provide and the peace of mind that you want. These include:
The only business insurance required by law is employers’ liability insurance, should your business employ people – whether on a full-time or part-time basis.
However, given most contractors are both owners and employees of their own company, you aren’t obliged to take this policy out. That said, the moment you employ someone, you need to buy employers’ liability insurance, which will protect you against a claim made by an employee for allegations of illness or injury.
While the many other contractor insurance policies on the market aren’t a legal requirement, hundreds of thousands of contractors in the UK opt to protect their businesses. But why is this?
Let’s take a look…
The level of cover that you take out is likely to depend on your contract and nature of your business. However, most contractors hold professional indemnity insurance at £1m, public liability at £1m and employers’ liability at £10m. If you work through a recruitment agency, it’s probable that they will stipulate the minimum levels required contractually. Even so, you should always assess your own business risk.
Again, much of this depends on the policy and the level of cover you require for your business, but at Markel, contractor insurance policies begin at just £5 per month. The cost of contractor insurance can be significantly lower than the cost of legal fees, professional representation and any resulting claims made against you or, in the case of IR35, tax investigations. Better still, it’s likely that you can spread out the cost of a policy by making monthly payments, should you prefer. To find out specific prices for a range of insurance policies, please click here.
Markel are an award-winning insurer with over 200,000 customers in the UK and are rated 4.8 out of 5 from 2,000+ customer reviews.