Contractor Insurance Cover Tips

Attitudes to insurance vary.  Some believe it to be a 'necessary evil' whilst others believe insurance provides their business protection.  An insurance policy is a legal contract promising to provide compensation for an event that may not happen.  

Adequate insurance provides peace of mind, and reassurance for the client and contractor. The most common type of business insurance is Employers Liability, Public liability and Professional Indemnity.  

Most employers are required by law to hold Employers Liability Insurance to insure against liability for injury or disease to their employees arising out of their employment. Employers Liability Insurance covers your business if an employee is injured or falls ill at work and will meet the cost of compensation for injuries or illnesses sustained to your employees, whether caused on or off site.

An employer  is normally insured for at least $5 million, however most insurers automatically provide cover of a minimum of $10 million. If you are an employer you must display a copy of the certificate of employers' liability insurance where employees can easily read it and keep copies for at least 40 years or risk a fine. These certificates may also need to be made available to health and safety inspectors on request.

Public liability insurance is a core cover of many types of insurance; in fact you are usually unable to buy employers liability cover without it. Public liability covers the Business to a specified limit of indemnity, usually $1m, $2m or $5m or upto $10m.  

Professional and Liability Insurance

What is Public Liability insurance?
Public liability insurance would cover accidental damage, such as if you were at a client's site and you accidentally knocked over a cup of coffee damaging thier laptop beyond repair, your Public liability insurance would cover any claim from the client.

What is Professional Indemnity Insurance?
Professional Indemnity Insurance protects your business against legal costs or compensation sought by a client if you have made mistakes or are found to have been negligent in any services provided.

One important point to bear in mind when considering professional indemnity insurance is that you need to be covered both at the time of the event and when the claim is made. This is because there is often a long delay between an event and a subsequent claim.

You can find companies offering insurance for contractors or companies that use contractor services in the Directory