Insurance for Freelance Contractors in Scotland
Q. Now I have set-up in business, do I need business insurance?
A. Most contractors now take out business insurance. Not only is this a contractual requirement by many clients, but we also recommend you cover yourself (and your company) in the event that something goes wrong while on contract.
Q. What types of business insurance are there?
A. For IT contractors, the key types of business insurance you are most likely to need are: Professional Indemnity, Public & Employers’ Liability, and Tax Investigation Cover. Alongside these main insurance types, you will often be offered additional types of cover for things like equipment, and premises (if relevant).
Q. What is Professional Indemnity (PI) insurance?
A. Professional indemnity covers you for financial claims made by clients in the event that you are negligent in your work or make mistakes. Most clients now insist that all contractors have adequate PI cover.
Q. What does Public & Employers’ Liability cover?
A. Public Liability cover will protect your business in the event of an accident or ‘incident’ involving third parties, e.g. you spill your coffee and damage some computer equipment.
Employers’ Liability cover is a legal requirement if you employ staff, even on a temporary basis. You are not legally required to take out EL cover if you don’t employ anyone, but it is usually bundled together with Public Liability cover.
Q. What is Tax Investigation insurance?
A. Many contractors take out this type of cover to protect themselves in the event of a tax investigation challenge by HMRC – including IR35 or ‘employment status’ enquiries. Such policies will cover your costs in defending any claims from HMRC, and may even cover any back taxes you are subsequently found to owe.
Q. Can I get a business insurance quote?
A. Yes, please click here for more information.