DO IT CONTRACTORS NEED INSURANCE?
In today’s technology-reliant world, almost every business will require the advice and support of an IT Contractor at some stage. As a qualified tech contractor, you work hard for your clients, you make sure they get the results they are looking for, and that all your work is done at the highest level of professionalism. However, if any kind of mistake is made (a data breach, mishandling client documents, missing deadlines), the results can be far-ranging and costly.
Being an IT Contractor, you have access to a company’s computer systems and private client information, and often deal with proprietary software. IT contractor insurance is designed to protect IT professionals against the unforeseen – for example, something going wrong during a project for a client. Without insurance, you would have to pay out of your own pocket for damages caused. If you have an insurance policy in place, it will help you protect against unexpected expenses, lawsuits, or business interruptions in your contracting business.
Adequate insurance cover will mostly be a contractual requirement specified by your agency or end client. There are many benefits that you can derive from taking a contractor’s insurance the main one being caution from extra cost. It would also cover acts of errors and omissions from services you performed. Contractors who have the proper insurance coverage are in a better position to win new jobs. If a client sees that your business is properly licensed and has appropriate insurance coverage, your company will be taken more seriously, and the chances of a successful bid increase.
Business insurance rates vary depending on what you do, the size of your business, and where you work. The key is to make sure you maximize your coverage while limiting your yearly insurance costs. Sometimes many contractors fear to take such policies in fear of high cost, however what one needs to know is that the cost of losses and damages that may occur is much more than the cost of insurance.
The importance of having contractor’s insurance is something we could never state enough. The following are the main types of insurance which many clients may request you have:
Professional Indemnity Insurance: Professional indemnity insurance protects you and your business against claims for alleged negligence or breach of duty arising from an act, error or omission in the performance of professional services. This unique form of coverage can protect you when the unexpected happens with your clients’ IT hardware and software.
Public Liability Insurance: With PL Insurance coverage, your company will be protected from wide number of scenarios, for example if you’re found to be responsible for damaging property, or for personal injuries caused as a result of your actions.
Employer Liability Insurance: As a director of your company you would be covered under Employer Liability insurance. It ensures that your business is protected against your legal liability for any injuries or accidents you incur. Your client will want you to have this in place, so any responsibility doesn’t extend to them.
Cost of Insurance:
Our advice is always to shop around but you should budget to pay around €500 for the above insurances. Our cost saving tip would be to consider switching accountant to Contracting PLUS. They place your company on their group insurance policy for free when they are your accountant, or if you are using their Umbrella Company service. More information on the benefits of their service is here.