19th June 2019
Mistakes happen, but a mistake doesn’t have to cost you your business. As a Contractor, it’s important to have Indemnity Insurance in place so you are not caught out if anything did go wrong.
Indemnity Insurance (otherwise known as Professional Indemnity Insurance) is designed to protect you and your company against any claims made by a client for a loss they suffer due to you to your work or advice. It will cover the cost of the claim so it’s important for many Contractors and limited company Directors to consider.
The policy will help you cover the cost of mistakes you may have made that results in the client losing money or business. This includes:
Breach of contract
This is when the client feels as though you have not completed the task you were hired to do to a standard that was expected and therefore breached what was mutually agreed in your contract.
If you give the wrong advice which leads to the client losing money, business or even damaging their reputation.
Infringement of intellectual property rights
If you have used something with asking the owner’s permission.
The losses that are caused by something you say or write about a client which then damages their reputation or business.
Breach of confidence
Losses made by the client because you’ve shared confidential or sensitive information without permission.
You may think that you could never do anything that would negatively affect your client but they may see things differently. If you don’t have Indemnity Insurance then you’ll have to foot the legal costs incurred as well as any compensation – which is not only stressful but could place you in a precarious financial situation, or even cost you your business.
There are many factors that influence the cost of an Indemnity Insurance policy; the level of cover you choose and the type of work you do play a large role in this.
If you are unsure whether Indemnity Insurance is required for you and your business, it’s important to know what your client expects. It’s not unusual for a client to tell you the level of cover they require to have in place in order for the work to be carried out. Alternatively, speak to an expert Contractor protection specialist. We speak to Contractor’s daily, so get in touch to see if Indemnity Insurance is right for you and your business.
All content is accurate at the time of publication