Peace of mind for contractors

Being a contractor carries a number of obligations and legal responsibilities and it’s important to know what they are and what your clients expect from you.
As with solicitors and accountants, contractors provide professional advice which is relied on by their clients.  As a consequence you no doubt act with a reasonable degree of care and skill in order to ensure your clients’ interests are protected.
However even where care and skill is exercised there is still the potential for you to make a mistake that causes financial loss or for a client to allege that you have made a mistake even if you have not.  While such disputes are rare, they do happen and the claims can be very high!
Important factors to consider:

• Clients have legal recourse to claim for mistakes/negligence by contractors.
• The majority of clients legally require you to have some level of Professional Indemnity Insurance.
• In most cases an agency contract will not protect you.

Professional Indemnity Insurance (or PI Insurance) will protect you against the cost of defending claims where it is alleged that a client has suffered financial loss as a result of your error, omission or negligence.
In addition, having PI Insurance will bolster the argument that you are in business on your own account, therefore aiding your IR35 position.
As well as PI insurance, there are others which you should be aware of:
Public Liability Insurance will indemnify you for your legal liability for injury or death to third parties and damage to third party property as a result of negligent acts by you or your employees.  This insurance will also cover third party costs and expenses.
Employers Liability Insurance will indemnify you for your legal liability for injury or death to employees, including claimant’s costs and expenses.  EL insurance is compulsory for any business that has one or more employees whether they are permanent, part time or temporary.
Most importantly, having adequate insurance will give you peace of mind, knowing that if the worst happens, you are covered and the consequences won’t affect your business or personal finances.
Even better, FW Accounting clients pay less for their insurance, with special rates available though our website, and for oil and gas contractors, through our special Group Scheme. Take a few minutes to check if you have all the insurance you need. If in doubt, get in touch and we will keep you right.