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)
Professional Indemnity 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 to be aware of:
Public Liability Insurance
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
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, QAccounting 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.
Can an accountant help your start-up grow?
As any business owner will tell you, launching a company isn’t exactly the easy option. But it’ll take something else, too. The support of a good accountant. If you’re a start-up founder (or still in the planning stages) and wondering if it’s time you got an accountant, look no further. This article will tell you what you need to know.
Why do I need a specialist property accountant?
Finances in property and real estate can be seriously complicated, even to a seasoned accountant. That’s why we recommend you seek the help of a specialist property accountant to keep everything straight. Let’s look at some of the basics involved.
How to choose the right type of accountant for your business
The accountant/client relationship is an important one as this is the person who’ll be by your side as you navigate the choppy waters of business ownership, so you’ll need to choose wisely. Here are eight pointers on how to choose the right type of accountant for your business.