IT Contractor Insurance - Professional Indemnity, Liability Overview

Contractors and Freelancers provide professional advice and services to a wide variety of clients and as such they may well be liable for any mistakes or errors they may make in the course of their duties. As a result, many contractors take out insurance cover just in case something goes wrong. In some cases, clients will insist that a contractor is covered by a professional indemnity policy before hiring.

Contractor Insurance quotes are very competitive these days - you can get an instant online quote for a variety of policies here (via our partners; Hiscox or simply business).

You may also be interested in our general section on small business cover.

Professional Indemnity (PI) Cover

This covers contractors against claims for negligence, unintentional breaches of intellectual property, loss of data or documents and claims for dishonesty. Clearly, the risks a contractor faces will depend on his area of expertise (i.e. - is he an IT contractor, a management consultant, etc). Typically, specialist insurers will provide PI policies tailor made to the area you specialise in.

Employers' Liability Cover

This type of policy will cover any 'employees' you may have within your company for any injury sustained at work. Employers are obliged to carry this type of cover by law. Even if you are the sole 'employee' of your limited company, you still should take out Employ Liability Cover. The legal minimum level of cover is £5m, but many insurers provide £10m.

Public Liability Cover

This type of cover is also known as 'general' or 'product' liability insurance. This will cover your company against third party claims - e.g. if someone visits your office and falls over a computer cable. It will also cover you if you accidentally damage property at your client site. Read our guide to Public liability Insurance.

Other Types of Insurance

Contractors may also be interested in covering themselves against computer/laptop damage, office contents insurance. Increasingly, contractors are also taking our policies to protect themselves against VAT and tax investigation liabilities. You can find out more about tax investigation and IR35 insurance on Contract Eye.