As a contractor, do I need business insurance?
If you have been self employed in some capacity, you will probably have considered some type of insurance cover for your business. As a freelancer working from home, I used to believe that my home insurance was adequate cover. Fortunately for me, I never had to call upon the policy which almost certainly would have proved me wrong.
Office insurance cover is an absolute must, if you want to stay in business indefinitely. It is a good way of gaining client credibility, and creates a sense of a ‘level playing field’. It is not a case of one rule for the big boys and another for you. The law sees you as no different to the large corporate establishments employing 50,000 people.
Within the IT sector, most contractors have to be correctly insured by law. Indeed, all one-man-bands had to set up limited companies, if only to support one person. With this limited status, comes a need for special limited liability insurance, which has two clearly distinct areas to consider:
1. General liability: covers all damage that you may cause whilst on the employer’s premises, extending to injury or damage to a member of the public.
2. Professional liability: covers errors and omissions arising whilst in the course of the contract. For within my business as an example, cover might protect against making a mistake in failing to authorise a picture from al library.
If your self-employed role involves the use of a van, then a different type of insurance cover is required. Specific business van insurance is available and is tailored towards the insurance of the precious cargo contained within. Some of the benefits that you should expect are:
1. 24 hour breakdown recovery: covers the breakdown and recovery of your vehicle over a twenty four hour period.
2. Vehicle replacement: covers the replacement of your vehicle should it be involved in an accident.
