What is contractor insurance?
Contractor insurance is not one insurance package, but rather an umbrella term for a variety of types of insurance that can protect contractors.
This may be for a plumber or an IT contractor who requires protection from the financial costs of dealing with legal proceedings, making compensation payments, replacing lost, stolen or damaged goods, or being unable to work, for example.
As every contractor is different and faces different risks, many insurance providers will allow you to tailor your package to match your specific needs. Given the broad scope of industries that contractor insurance may apply to, it is important to consider the specific risks of your business to make sure you choose a policy to suit the way you work.
Contractors all-risk insurance
As its name suggests, contractors all-risk insurance is designed to cover many of the risks you are likely to face during a construction project.
As standard, it can include contract works – which protects against events that interrupt the progress of your work – hired-in plant cover, own plant cover, and tools insurance. It can also be tailored to particularly hazardous or risky work.
Exactly what is included may vary between providers, so make sure that you confirm the details of your insurance.
Professional indemnity insurance for contractors
Many contractors are in the business of offering expert advice and services to clients. This could be in the form of IT security analysis, accounting services, or construction site management.
Whatever work you do, if you make a mistake or give incorrect advice that leads a client to suffer professional or financial loss, you could face claims against your business for negligence. Professional indemnity insurance for contractors can cover legal and compensation costs resulting from an accusation of negligence, as well as replacement costs, for example, if work needs to be done again.
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Contractors public liability insurance
Public liability insurance covers all manner of incidents that might affect members of the public either on your premises or as a result of your business activities. This can include personal injury, or even death, as well as loss or damage to someone’s property caused by you or one of your employees if you are not a sole trader.
For example, if you’re a roofing contractor repairing a leaking roof, and a dislodged tile falls. Whether that tile lands on a client’s head or their car, contractors public liability insurance should have you covered.
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Contractors employer’s liability insurance
If you employ any staff, whether part or full time, you are legally obliged to have employers’ liability insurance, which should cover you for at least £5 million. Without it, you could face a £2,500 fine for every day they are not insured. The only exception is if your staff are members of your immediate family or based abroad.
Other types of insurance for contractors
If you’re a trade or construction contractor, then you may have expensive tools and equipment to protect. If you don’t plan on covering these under all- risk contractor insurance, then you can take out separate tools, equipment, hired- in plant or own plant cover, according to your business needs.
Finally, contract works insurance can be a great addition to your policy if there is a risk of a disaster, such as a fire or flood destroying, disrupting or delaying your work. This may already be included in your insurance if you have taken contractors all- risk insurance.
Likewise, personal accident insurance can be a big help if an injury prevents you from working for any length of time or, the worst happens, and you are fatally injured either at work or elsewhere.
You may also consider business buildings insurance, business contents insurance, and cyber and data insurance if these are relevant to your work.