PI insurance will cover contractors and consultants in the event that they are sued by a client for making a mistake at work – typically as a result of negligence, loss of data or documents, or breaches of intellectual property.
Although the actual number of claims against PI policies is very low, many end clients (particularly in the IT sector) now insist that prospective contractor candidates are adequately covered.
What eventualities are covered by professional indemnity insurance?
For PI policies, as they relate to professional contractors in particular, some of the main events covered include:
- Negligence – where you have given the wrong advice to a client, or made a mistake while working for a client.
- Infringing IP rights – where you have breached the intellectual property rights of a client, such as trademarks or copyright.
- Breach of contract – where you have failed to supply software and/or hardware as initially agreed with the client.
- Loss of Data – where you may have accidentally lost data or documents
Choosing a contractor PI policy – things to bear in mind
- You will often have the chance to take our retrospective cover, which will cover your business from when it was first formed, assuming you are not aware of any claims which could be made against you from a past life.
- Some end-clients will specify the minimum amount of PI cover you are required to take out, otherwise industry experts always suggest you take out as much cover as you can reasonably afford.
- Professional Indemnity insurance will cover the costs of representation if claims are made against you, and may even cover the costs of any damages – but you should check with your insurer to be sure what level of cover a policy will provide.
- Many companies offer business packages for contractors / consultants which include other products such as business liability cover, or equipment cover. You will often find that the cost of an annual package is cheaper than buying each product separately.
How do I get contractor PI cover?
We have worked with leading insurer, Hiscox, for many years. You can obtain an online quote right away by clicking on the button below:
- Professional Indemnity insurance for umbrella company contractors
- What is professional indemnity insurance?
- Professional indemnity – what is run off cover?
- Professional indemnity – what is retroactive cover?
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- ClearSky Accounting - specialist support for contractors
- Visit Hiscox for Professional Indemnity and Business Liability Insurance
- Contractor Finance - up to £30,000, when you need it
- InTouch Contractor Accountants - Personal Online Accounting
- Join PCG - Free impartial start-up advice for contractors.
- Visit Qdos Consulting for tax investigation cover and IR35 insurance.
- 90% Pay Retention for Contractors - Helix Management Ltd