Contractor Responsibilities
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.
More Blogs
Forex Traders Tax Guide 2024
Forex trader tax is a topic that can seem complex – particularly as different countries have different rules around taxation on forex trading gains. If you’re looking to discover the rules on forex trader tax in the UK, look no further. We’ve put together a guide on how forex trading is taxed, your record-keeping and reporting obligations, how spread betting is different from forex trading and more.
Challenges in Public Sector Finance: Income and Spending Gap
In December 2023, the Office for National Statistics announced that, in the first two thirds of the year, the deficit in public sector spending had reached £116bn. This figure was £27bn higher than the same period in the previous year. But why is the gap between income and spending in public sector finance widening? What are the implications? How can these challenges be addressed? Read on to find out…
The Future of Management Accounting
Gone are the days when management accounting simply involved bookkeeping and cost accounting. The business environment has become increasingly complex, and accounting firms and processes must evolve to keep up. But what is the future of management accounting? Read on for our top accounting trends – including the role of technology in accounting.