The Importance of Contractor Insurance
Any professional working as a contractor must be aware of the potential misfortunes that their limited company can endure without the existence of proper contractor insurance. Any individual that is new to contracting is advised to seriously consider certain insurance policies in order to successfully operate through their limited companies.
What is Contractor Insurance?
Contractor insurance provides assurance to small businesses, giving one-man limited companies the relevant and sufficient financial protection they may need against a whole range of professional misfortunes. What makes contractor insurance policies unique however is the fact that each product is specifically designed with freelancers/contractors in mind, which is very beneficial to anyone operating through their own limited company.
The insurances themselves range from common professional indemnity policies, to more precise, industry specific types of cover (protection for Oil & Gas workers as opposed to IT contractors for example) and others that only apply to a minority of those within the contracting profession. Each policy is very important to the business that its cover protects, and contractor insurance is something that should never be overlooked.
Professional Indemnity Insurance
Professional Indemnity Insurance is an essential policy for limited company contractors. The cover is vital to those working through temporary contracts, and is important as a principal form of company protection.
Looking at the benefits of Professional Indemnity Insurance (PI Insurance or PII), it comes as no surprise that it is one of the most popular and common insurances put in place by contractors across the UK.
What is PI Insurance?
The insurance itself covers the contractor against any claims of professional negligence. It will cover both the legal defence costs and any resultant damages if the claimant is found to be negligent.
Any business providing advice and consultancy services should consider a PI policy. Most contractors who work through agencies will be required to have the insurance contractually, as agencies are obviously keen to ensure both them and the end client are protected.
Having Professional Indemnity Insurance is a proven way of improving your IR35 status. HMRC’s ‘business entity tests’ make specific reference to the insurance and it is a key indicator to being in business on your own account.
The advantages and benefits of contractor insurance are endless, and all limited company traders should be aware of the risks that exist without a proper policy in place. Contractors remember, always use protection.
Self Assessment – Q & A
Self-assessments. We have all heard of them, you maybe even know what they are. However, here at QAccounting some of our most frequently asked questions are about self-assessments. So below we have outline some of the most common questions we get asked, and the answers we get so tired of giving… just kidding.
Setting Up a Limited Company – 5 Key Things to Consider
If you are looking at going self-employed, then setting up as a Limited Company (LTD) may be the best option for you.
The Benefits of Having an Online Accountant
Here at QAccounting we are part of one of the UK’s largest contractor service providers. We started operating over a decade ago (around the same time DFS started their first sale) and have been dedicated to serving self-employed professionals ever since. One of the perks of choosing and accountant like QAccounting is that we offer all of our accounting services online.