A Guide to Insurance for Contractors


What insurance does a contractor need? It’s a question you should be asking if you’ve decided to work independently in any capacity. If things go right, you get all the benefits – and if things go badly wrong, you could end up with some heavy costs. Having the right types of insurance offers you protection when the worst happens, but what type of cover should you be considering? We answer the burning question: “What insurance do I need as a contractor?

Professional Indemnity Insurance

Apart from getting peace of mind, professional indemnity insurance could help you to land contracts. Many clients will insist on it, especially if they stand to lose money if they’re acting on your advice. This type of insurance might not be necessary for all contractors, but it’s especially necessary for people whose work involves giving advice or producing designs. Engineers, IT contractors and consultants are those most likely to need professional indemnity insurance. Should there be legal action or claims against them, it will cover the costs. 

Public Liability Insurance

If your work is carried out in public spaces or on a client’s premises, public liability insurance protects you against any claims for damage to property or injuries caused to passers-by. No matter how carefully we work, we can all imagine the type of accidents that can happen while we’re on the job. If one should happen, and there’s significant damage or injury, the contractor will be sued for damages and public liability insurance covers the cost. Because clients will be concerned about the consequences of potential accidents, they’ll often check whether contractors have this type of insurance. 

Employer’s Liability Insurance

If you employ people, you definitely need employer’s liability insurance. On-the-job accidents occur in just about any workplace, and without cover, you’ll be solely responsible for any resulting damages claims. It’s also illegal to send employees to work if you don’t have employer’s liability insurance – so you’re likely to be liable for fines if you employ people and don’t have this type of cover. 

Personal Accident Insurance

If you are injured at work, you won’t be able to earn any income. That can represent a personal disaster of no small magnitude when you’re self-employed. Personal accident insurance ensures that you have cover if you’re out of action after an accident. It’s peace of mind well worth paying for!

Office Insurance

If you’re doing the work you contract out from an office, it’s worth looking at office insurance to protect your workspace in the event of a fire, a natural disaster, burglary, or vandalism. After all, your workspace and its equipment represent a substantial investment on your part, and that makes them worth protecting. 

Travel Insurance

A lot can go wrong when you’re travelling abroad for work. Your equipment could be lost or damaged, or you might have an accident while far from home. Travel insurance ensures that you’re covered if you suffer losses or accidents while travelling. If overseas travel is rare in your line of work, you can get temporary cover for the period you plan to be away. 

Tax Liability Insurance

If you’re a sole trader or limited company, you might find yourself in for some nasty surprises from Her Majesty’s Revenue and Customs service. There could be IR35 enquiries, questions about your PAYE compliance or disputes over VAT. Tax liability insurance is there for those who honestly work to comply with taxation but nevertheless experience these inconveniences. 

Are There Insurance Packages for Contractors?

While there’s no unique type of insurance for contractors, insurance companies sometimes compile packages aimed at the independent contractor market. In doing so, they look at the industry in which you work and tailor their packages accordingly. For example, they are likely to be conversant with the risks a construction contractor may face and offer several different types of insurance combined into a package deal targeting this specific market. If you choose a package like this, you should get cost advantages since they amount to your taking out several policies with an insurer. 

Can Contractors Get Away With Not Having Insurance?

If you’re working solo or are taking contracts directly from an agency, it’s extremely important to have up-to-date insurance. As we’ve seen, several types of insurance are likely to be necessary to protect contractors from any damages claims that may arise. However, there’s one exception to the rule. 

As an umbrella company that maintains high standards, Evolve CS ensures that all contractor activities are covered by its insurance policies. That means lower costs for you – after all, your own insurance policies will require payment even if you’re not currently working on a contract. It also means less admin, time spent shopping around for the right policies, and avoidance of the risks inherent in not being properly insured. 

All in all, it makes sense for contractors to work through an umbrella company – and many of your clients will prefer it too. That’s why many businesses and agencies who engage contractors insist that they should work through Evolve CS. Simplify your work life. Avoid risk. Get all the benefits of being an employee but still be a free agent. Contact us today!