IT Contractor Guide
A Guide to Contracting for IT professionals
Insurance for IT contractors
Insurance should be amongst the top priorities for IT contractors. Due to the risky nature of a job where you are responsible for a client’s IT infrastructure at some level, it is important to be covered in case of mistakes. IT employees have the protection of their employer’s insurance but contractors must make their own arrangments.
A comprehensive insurance policy that includes professional indemnity cover will help maintain the stability of your business in the event of compensation claims resulting from mistakes in your work that have caused the client a financial loss. The clients will also see from your insurance cover that you are conscientious and you may therefore be a more attactive prospect.
The main insurance covers that IT contractors would buy are:
There is always room for error when people are involved and this can especially be the case in the IT sector. Regardless of an IT professional’s experience and knowledge mistakes can happen, and as an independent contractor you have a responsibility to mitigate any damage that your actions may cause.
Professional indemnity insurance helps you cover the costs of any claims made against you in the event that your actions result in a financial loss for your client. A policy from Simply Business will cover the costs of the claim itself, along with any reasonable expenditure that you suffer as a result of your defence of the claim.
If you are uninsured or underinsured, you run a very serious risk of being bankrupted by a compensation claim. Professional indemnity insurance can safeguard you against this possibility.
Most IT contractors take out public liability insurance. Public liability insurance helps to cover the potentially crippling costs of claims made against you by members of the public or clients for injury to them or damage to their property.
If, for example, while working on a client site you built a faulty computer which caused an electrical spark and resulted in a fire, you would be liable to pay for the damage. This could land you with a bill for thousands of pounds in compensation. Public liability insurance is therefore essential if any part of your business is public-facing.
It is also important to remember that many organisations demand a minimum level of public liability cover before they will consider a contractor. It is generally considered that a minimum level of cover for most contractors is £2 million. However, if you are working in the public sector you are likely to find that you require cover of up to £10 million in order to secure contracts.
Tools and equipment
IT contractors inevitably collect a lot of tools and computing equipment which are vital to their jobs. Computer equipment especially can be expensive to replace and items like hard drives can be damaged fairly easily.
Tools cover will ensure that you have the money to replace tools and equipment that has been lost, stolen or damaged.
Buying your insurance
With Simply Business you can tailor a policy to your individual needs using our simple form and compare quotes from a range of insurers. Buying online is quick and easy and our UK contact centre staff are on hand to help if you have a question.
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