As a Contractor, Do I Need Public Liability Insurance?
The short answer to this question is yes, although it is not a legal requirement to have public liability insurance. Many contractors will be contractually obliged to take out business insurance cover but most take it out to ensure that they have peace of mind whilst working. There are 3 types of business insurance cover that you should definitely consider taking out, including public liability insurance:
Public Liability Insurance
Professional Indemnity
Employers’ Liabilily Insurance
Although money may be tight when starting out as a contractor, here at Gorilla, we always recommend that you take out two types of insurance: professional indemnity and public liability. Although at first reading they may sound similar, they actually cover two different eventualities, and in combination serve to protect contractors for the life of their work. If you’re on the fence about whether or not to take out public liability insurance, have a read of our advice below and give it some serious consideration.
What is Public Liability Insurance and Why Have it?
Public liability insurance is a handy type of policy which will protect you against any claims made by clients or the public should something happen to endanger the safety of a client or their property on your premises, or through your actions on their premises. For example, if a client visited your office and tripped over a cable, they could make a claim against you – but with PL insurance, you’ll be covered against the cost. It seems pretty straightforward for why you need it – and it is! Here are just three reasons contractors regularly take out public liability insurance:
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Peace of Mind for Clients
As with professional indemnity insurance, many businesses will refuse to take on the services of a contractor who is uninsured. This is to ensure they can trust contractors and are themselves protected if something were to happen. On top of this, taking out a policy shows that you’re prepared should something happen and that you’re sensible in covering every avenue, granting potential clients (and employees) peace of mind.
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Health and Safety
There’s an element of health and safety to public liability insurance. Should you (or anyone you’re employing in the future) visit a client’s office, you’re protected against any accidents you may cause there – such as spilling coffee on machines or leaving equipment out which causes someone to trip – as well as if an incident happens on your premises. Keeping a tidy office just won’t suffice when it comes to health and safety, as many contractors don’t know that they’re liable on a client’s premises too.
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More Protection for the Contractor
Indemnity insurance will cover you against things such as loss of data, libel and the leaking of confidential information, whilst public liability insurance will keep you protected from claims related more to equipment and health and safety. We always recommend starting with both to cement your position as a serious player and to keep you safe, because things do go wrong!
Why You Should Have Professional Indemnity Insurance?
Professional indemnity insurance provides cover for negligence, intellectual propery breaches and loss or damage to client data and systems. Similarly to public liability insurance, it is often requested at the time of contract agreement but not always.
Employers’ Liability Insurance and Its Benefits
The thrid type of contractor insurance we highly recommend our contractors have is employers’ liability insurance. This ensures your protection against employee claims. It is a compulsory requirement for almost all UK business, although since 2005 if you run a limited company with only one employee who owns 50% or more of the share capital then it is no longer a legal obligation. For most contractors, you must have this type of cover.
At Gorilla Accounting we have partnered with Kingsbridge Contractor Insurance to offer all our contractor clients can easily have appropriate business insurance in place. Visit our page for more information about contractors insurance.
Looking for accounting assistance tailored to contractors? Get your finances set up and on the right track with Gorilla: professional contractor accountants and limited company formation experts. Get in touch to talk to a member of our team about how we can help!
