Contractors’ insurance

Why do I need contractors’ insurance?

Running your own business and working on a contract basis for clients comes with all sorts of risks. You could be held liable for accidents, injuries and mistakes. You may get injured yourself while working or damage vital business equipment.

Contractors’ insurance can help protect you.

For example, having public liability insurance as part of your contractors’ insurance policy can be helpful if you accidentally damage a client’s expensive IT equipment. Or if a client comes to your home, injures themselves by tripping over a rug, and sues you.

Then there’s all the equipment you work with – whether it’s expensive tools, computers or tech. Contractors’ insurance can pay out to repair or replace equipment that gets damaged. So you don’t have to dig into your earnings and can carry on working to schedule.

And personal accident cover as part of contractors’ insurance can pay out for loss of income if you have an accident and an injury leaves you unable to work for a prolonged period.

Without contractors’ insurance, you could find yourself losing a lot of money if something goes wrong.

What does contractors’ insurance cover?

You can adapt contractors’ insurance to suit your trade. So, depending on what type of business you run, policies can include:

• Public liability insurance - Provides cover if someone is injured or their property is damaged as a result of your work, and they make a claim against you for compensation. For example, if you’re decorating a client’s home and you accidentally smash a window. The cover will pay out for damages and legal costs.
• Employers’ liability insurance - Covers claims against you by an employee who is injured or gets sick while doing their work.
• Professional indemnity insurance - This cover helps if a customer or client claims that you made a mistake in your work, gave them poor advice or didn’t meet the brief adequately. Your insurance will cover legal costs to defend your case and pay out for any damages awarded.
• Tool cover - Pays for the cost of replacing or repairing tools or equipment that are lost, damaged or stolen, up to an agreed amount.
• Business and office equipment - Covers theft, loss or damage of items like your computers, laptop and printers.
• Hired-in plant insurance - Covers machinery you’ve hired, like diggers, concrete mixers and forklift trucks in the event they’re stolen or accidentally damaged.
• Owned plant insurance - You’re covered for theft, loss, accidental or malicious damage to your own plant machinery.
• Contract works insurance - For construction workers, this covers work that’s in progress on a domestic or commercial site. So if something happens to disrupt, delay or damage the work you’ve done, it’ll pay out. For example, if there’s a fire or flood that destroys the work you’ve already completed.
• Legal expenses insurance - Helps pay for legal costs if you need to pursue a claim or defend against a lawsuit. For instance, employee disputes.
• Personal accident insurance - If you’re injured at work or while commuting to work. It can pay out a weekly sum or a lump sum to help you financially after a serious injury.

Professional indemnity for contractors

This covers you if a client claims you’ve made mistakes, been negligent or failed to perform the contracted job. Or that your services or any advice you gave them resulted in financial losses.

Professional indemnity insurance will cover the costs arising from a claim against you. This could include paying for a solicitor to defend your case and any damages awarded to your client.

Do I need contractors' liability insurance?

If you come into contact with any third party in your contractor profession, you might need to get contractors' liability insurance.

Liability insurance will cover the costs of a third-party claim against you.

For example, if you were employed by a shop to fit some new shelves, and someone trips over your tools, they could make a claim against you, which could be expensive.