What insurances do you need and what do they cover?

As a limited company contractor there are a number of insurances to consider before you start trading. Here is a summary of the most important:

Professional indemnity
Provides cover for legal defence costs and damages awarded against you if you are accused of professional negligence, making an error or omission, or giving bad advice which results in your client losing money.

Public liability
Provides cover if someone is injured or property is damaged as a result of your actions whilst supplying services. Whether you are on your own premises or at a client’s site, you have a duty to protect anyone who might be affected by your activities. If you fail to do this, you may have to pay substantial compensation.

Employers' liability
Provides protection against claims from employees. As a contractor employing just yourself or yourself and your spouse, the likelihood of any claims is clearly low. However, many contractors do hold the policy because it is typically required by recruitment agencies and end clients.