Do i need professional indemnity insurance as a contractor

Instant Do wnloa Mail Paper Copy or Hard Copy Delivery, Start and Order Now! Do contractors need indemnity insurance? What kind of insurance do you need for a contractor? What is professional indemnity insurance?

Does professional indemnity cover installation?

When operating as a limited company contractor, many risks faced by businesses can seem to not apply. If you’re starting out as a contractor , chances are you will be obliged to take out some kind of business insurance as a condition of your contract. You don’t often hear of IT contractors getting sued for professional negligence. Professional Indemnity Insurance for IT Contractors. But, should it happen, the cost risks putting you out of business.

In the UK, claims for direct damages arising out of professional negligence can run in excess of £50000. I am a Contractor do I need PI insurance ?

Most Contractors will have some form of contract which in most cases will stipulate that you require a certain level of PI Insurance in place. This is usually tied in with clauses that make you responsible financially to put right any errors or mistakes. What level of indemnity should my PI. Depending on your trade , you may be legally required by your trade association or regulatory body to have professional indemnity insurance, notably for surveyors, architects, medical professionals and indeed IT contractors.

Many contracts require you to have professional indemnity insurance , limiting the cost to the employer if you do make a mistake. Clients may be reluctant (or even refuse) to hire you without professional indemnity insurance. To have the best chance of getting a contract, arranging professional indemnity insurance is a necessity.

Who needs professional indemnity insurance? Anyone who provides advice , designs or offers a professional service will need PI insurance cover. With growth in the freelance contractors market this means that there are now over 5different occupations buying this insurance.

A few examples are shown below. If you engage other workers as employees, you will also need workers compensation insurance. If you are producing designs and specifications as part of the quote process you should consider professional indemnity insurance because the potential client could give those designs and specifications to a different electrical contractor to get the work done.

An average handyman would be the prime example for this type of contractor. Of the three common business insurances , it is probably the most likely to actually be used by a contractor.

To highlight the importance of professional indemnity insurance for IT contractors , here are reasons why it is vital to arrange the right cover for your business. No insurance , no contract. Clients will want to ensure that any errors made lie with the contractor that provided the services, and guarantee that the contractor is legally responsible for correcting them.

Your professional body requires it - You might belong to a professional body or industry association where professional indemnity insurance is compulsory What professions need PI? Subcontractors and professional indemnity insurance Engaging subcontractors to assist with specific tasks or heavy workloads is part of a normal business model. It is important to be aware, however, that when subcontractors undertake work for and on your behalf, you pick up the contingent liability for their work. However, even if you are the most careful contractor , it is always possible to find yourself in a situation where the client may take legal action against you if suffering a financial loss after your services. Obtaining a professional indemnity insurance policy will not only provide you with the protection that you need , but it can actually serve as a selling point.

There are not many other contractors that are investing in this policy and acquiring a policy like this can make your company stand out. In those days, the employer engaged a team of professional designers and presented the plans and specifications to the contractor to build. It also extends to provide further cover for compensation or damages payable to rectify those errors.

While this cover is useful to contractors and freelancers across all industries, there are certain professions within the self-employment sphere that have a greater risk of a claim than others. Whether that’s due to a mistake in measurements or strategic advice that ends up losing a client money, it’s important to ensure you’re covered should an error occur. These include IT contractors, business coaches, engineering contractors, project managers, marketing consultants and graphic designers, to name a few. Getting PI insurance is a requirement for some licensees and is a matter of simply contacting an insurance provider.

You can view a list of licence classes that require PI in the MFR Regulation. Once you become license you need to make sure that your insurance remains active. Such a policy should protect the contractor , as well as where the contractor keeps the design in-house.