Insurance, What Is It Good For?

Insurance is too often heard with a shudder and a groan. It is commonly associated with deceit and betrayal after many years and cases of cowboy companies offering up worthless policies with endless restrictive small print and sold on twisted words and misinformation.

Business insurance does not fall into this category. Although claims for Professional Indemnity are rare, the majority of contracts, particularly standard agency contracts, will stipulate that you hold relevant business insurances such as this one. Another commonly stipulated insurance policy is Public and Employers Liability Insurance, which most office-based contractors will rarely claim from also.
In a nutshell, Professional Indemnity insurance covers for the financial loss to your client from your error or negligence, and Public Liability for the death/injury to a third party or damage to third party property. Employers Liability is similar but it refers to the death/injury of one of your employees and regardless of what your client asks for, is a legal requirement if you have any employees in your company other than yourself.

You may only be taking out insurance for the sake of complying with the terms of your contract, but there is a reason why your agency or end client requires you to hold business insurance policies in the first place: protection.
Taking on a contractor is risky business; you endure less scrutiny during the hiring process, you are temporarily allowed access to a company’s data or equipment and so on to which you might cause damage, you are not subject to any disciplinary action and they do not have so much control over you. Clients want to know that their business will be protected from any mistakes made by their invited intruder.

The policies are not just beneficial to your client neither. Although rarely claimed upon, the policies safeguard your business against potential bankruptcy from an expensive court case. Remember that the policies cover for the cost of defence for allegations even if they are wrong ones.

On top of this, business insurance looks good in the eyes of the IR35 legislation. Holding business insurance displays to HMRC that you are operating like a genuine business. Employees would not hold such insurance policies as they would be covered under the policies of their employer. Taking out business insurances also displays that you are taking a financial risk, for which you are seeking cover for, which is one of the tests for determining employment status.

So to summarise, 4 good reasons for holding business insurance:

  1. They satisfy contractual stipulations.
  2. They protect your business against costly disputes.
  3. They assist in proving your IR35 status.
  4. It is a legal requirement for the case of Employers Liability insurance where you have any employees other than yourself in the business.

Qdos is a reputable insurance company offering business insurance policies at affordable and reasonable prices with no hidden costs. You can find a quote instantly online without giving us your details first, or over the phone with a member of our knowledgeable sales team. We have also been dealing with the IR35 legislation since its implementation and are considered one of the UKs leading authorities on the matter. If you don’t want to take our word for it, check out our Feefo reviews or just ask around.

By:(Archived) Jane Hailstone

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