When it comes to any form of insurance and paid protection, one of the most common questions that crops up is when exactly one should make a claim. Of course, if someone crashes a car, the first thing that they would be asking (apart from ‘am I alive?’) would be what is the number for my insurance provider? When it comes to professional protection however, notably contractor insurance, the potential for claims on a cover policy is less clear cut. It is important that when the time comes, contractors know exactly what they are entitled to as set out in their insurance policy.
Maintaining professional indemnity and protecting limited company finances are both very important when contracting, the safety of PSCs being the priority of self-employed professionals. Within the business market, no matter what sector one may be working benefits of a starting a company in, all self-employed workers are liable and susceptible to claims being made against them. Whether this is because of an accident occurring to others around them, their professional mistakes, or simply a loss of client property or finance, contractors must obtain sufficient insurance to stay protected.
Contractor insurance is highly valued as a form of cover, each different policy providing protection against a number of potential eventualities that could result in financial loss to a limited company. It must be noted that this form of insurance provides cover to the limited company, and not the individual, thus for example it would be ‘Larry LTD’ that was covered, and not ‘Larry’ himself.
Deciding whether or not one can claim on their insurance can differ, obviously depending on both the policy itself and the circumstances of the issue. Insurance for contractors is vital in the profession, and the insurance works commonly on claims made basis. If a contractor working via their limited company was to be on the receiving end of a liability claim, then their insurance would act as financial cover. Popular contractor insurance products can cover eventualities from accidents and sickness, tax and IR35 related issues, and even cover travel insurance, all serving a purpose tailored specifically to a contractor’s needs.
Being financially covered is so important to professional contractors, as being business owners; their limited company is potentially vulnerable to liability claims as a result of a number of different eventualities.
Contractor insurance offers far more than the standard cover in many cases, the existence of a policy offering the best of both worlds, giving the policy holder further benefits than financial protection when insurance is in place. What this means is that many policies are advantageous regarding the professional status of a contractor regarding tax and HMRC guidelines.
Professional status and agreeability in the eyes of the tax office can have detrimental effects on the contracting professionals in the UK, and the existence of a number of contractor insurance products can aid compliancy to HMRC legislations. Concerning tax issues facing contractors, IR35 plays a major part in their line of work, thus contractor insurance and its beneficial qualities when it comes to tax status becomes especially important.