What’s the worst that could happen? Common insurance scenarios and how to avoid them

2nd April 2017

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At Kingsbridge there are a few questions we get asked more than any other. ‘What is IR35?’ ‘Do I really need insurance?’ ‘What future do contractors have in the post-Brexit socio-economic landscape?’ (ok – maybe not that one so much). But we do often get asked what the worst-case scenarios are for a contractor. Read on below for our tips on how to handle them.

Making the leap from ‘regular’ employment to contracting is absolutely worth doing. You have the freedom to work for yourself, the ability to dictate your hours and availability, and you’re your own boss.  As with any change, however, there are some steps that you’ll need to take more carefully than others. Making sure you have the right insurance cover in place is a good start.

Let’s say you’re working on your own project and you’re suddenly taken sick. If you were in an office you’d more than likely have a colleague who’d be able to step into the breach. When you’re working on your own, having employees is often a luxury you can’t afford (or simply don’t need). Most contracts will contain what’s known as a substitution clause, allowing you to sub in someone else to continue with or complete the job whilst you recover. If you have employers’ liability cover in place and something goes wrong whilst your replacement is in charge, your insurance will still cover you.

The most commonly claimed on element of our contractor insurance policy at Kingsbridge is our personal accident cover. As a contractor, the main catalyst for any enforced time away from jobs is likely to be injury or illness. If you’re injured and unable to work you’re likely to be looking at significant financial loss. If that injury occurred in the course of your work, and if you have personal accident cover in place, you’ll be paid a weekly sum whilst you recuperate (up to £2,000 a month.) You’ll also receive a substantial pay-out if your injury leaves you unable to work in your chosen field.

Everyone makes mistakes occasionally. The thought of damaging someone else’s equipment, or injuring someone whilst you’re working, is enough to make most contractors wake up in a cold sweat at night. Holding public liability insurance is a sure-fire way of mitigating those risks, allowing you to go about your work safe in the knowledge that you’re adequately covered.

There are rare scenarios when your client might dispute the quality of your work. No-one wants to be told they’ve done a bad job, but it’s always a good idea to be prepared. With professional indemnity cover in place you’ll have protection if anyone claims against you for negligence. You’ll also have a safety net there to cover loss of documents or data, breaches of intellectual property, defamation, and libel.

99% of the time you’ll never have to face any of the scenarios laid out above. Many contractors go their whole career without ever having to claim (or having claims made against them). But it’s always a good idea to have some cover in place. Think of it as an arm around the shoulder or a comforting word in the ear. You’ll be glad it’s there when you need it.

Kingsbridge Contractor Insurance are experts in contractor insurance. Their focus is firmly on the contractor community and the unique challenges it faces. One of iContract’s main service partners, any contractor using the iContract platform can contact Kingsbridge for any insurance enquiry as a contractor.

Find out more about Kingsbridge by visiting their site here

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