When operating as a limited company contractor, many risks faced by businesses can seem to not apply. Professional indemnity insurance is often stipulated in contracts, but many contractors are unaware of why they must hold it when running a limited company.
Professional Indemnity or PI insurance reacts in circumstances where a client claims to have suffered a financial loss as a result of a professional error made, or alleged to have been made, through the services you have provided.
“[SMEs] either don’t recognise that they have an exposure, or perhaps they think it’s a one in a thousand-year event and it’s not worth the cost,” Jim Gaskin, financial lines manager at Zurich UK comments to Insurance Business UK.
With this perceived lack of risk, influenced by the rise of comparison sites, cost is one of the main factors when it comes to purchase decisions for insurance policies, so ensuring our premiums are as low as possible is a key element of being one of the largest providers of contractor insurance.
“For those individuals, particularly one-man operations or very small businesses, they may not recognise that they have this threat, because it hasn’t yet happened to them. But it only takes one complex issue to take up all the management time for a small SME – which typically doesn’t have sophisticated resources, or a legal and compliance department like large companies have – and that can really threaten the business.”
We recommend contractors check their contractual obligations prior to purchasing insurance, and evaluating their potential risk to ensure the appropriate level of indemnity is chosen.
Our Professional Indemnity policies give you a free IR35 contract assessment to get you more bang for your buck, with documentation issued immediately, and easy renewals either online or with our sales team, so you don’t have to worry about keeping your insurances in check.
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