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What insurance does an IT contractor need?

Professional Indemnity for IT Contractors 

The IT sector is made up of hundreds of different roles and professions. Qdos have been supporting IT contractors with their insurance needs for many years, with over 40,000 IT specialists currently covered with Qdos against the business risks they face.

Professional Indemnity Insurance is one of the most popular policies for IT contractors. Our PI insurance has one of the most competitive premiums on the market and we include a free IR35 contract assessment (worth £49) upon purchase.

What is Professional Indemnity Insurance?

Our professional indemnity policy will seek to protect your business against allegations of financial loss caused as a result of error, omission or negligence in your services.
The IT sector in particular has an increased risk of losing or divulging confidential data/information. In an instance like this you could be targeted with a claim for negligence. Whilst most professionals will be confident in their ability, errors/accidents are unforeseen and can be extremely costly.

A claim for an error or omission in a project could cost you and your business a significant amount of money. These policies are in place to ensure you don’t have to pay for all the legal fees and compensation should you make a mistake while working, in some cases businesses go bankrupt because the costs are far more than expected, or the business didn’t know to purchase Professional Indemnity Insurance. Even in the best case scenario you would still have to spend a lot of time and effort fighting a claim; distracting you from your actual work and limiting your earning.

How much Professional Indemnity cover do you need?

This can depend on your contract requirements or you may want to base the limit on a previous policy. Some professional bodies or regulators may also provide guidance on how much cover you require. Attention should be paid to the nature of the project/clients worked for and the potential consequences should an error be made.

We offer policies with £1million, £2million, and £5million indemnity limits. As mentioned, you should review your contractual requirements and assess your risk before purchasing. You may be exposed to a higher risk in your specific circumstances and this may affect how you want to purchase your insurance.

Our IT contractor indemnity insurance does not include retroactive cover as standard, so if you have had a gap in cover, have moved to Qdos from another provider, or have been operating previously without insurance, you may wish to include ‘Cover for Past Work’ at the quote process.

Check your contract

From our experience, most clients put a PI insurance stipulation in your contract. Depending on the client they may also state the exact amount of cover they want you to hold. So, although holding Professional Indemnity may not be a legal requirement, in this case it is a contractual requirement.

If you don’t have any stipulations in your contract you may want to take this policy out for peace of mind and to protect you in case anything does go wrong. A lack of a contractual clause doesn’t mean you shouldn’t buy it or won’t need it, as anyone providing a professional service would potentially have an exposure.

Other policies to consider

Public Liability Insurance:
This is a popular insurance policy among IT contractors. The nature of IT Contracting means it can be common to attending client’s offices, this policy covers damage to third party property or injuring third parties. 

Jury Service & Legal Protection:
Jury Service & Legal Protection is a legal expenses insurance designed specifically with contractors in mind, insuring you against the costs involved with a number of legal disputes and the loss of income should you be called for jury service during a contract. 

 

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By:Alfie Rowley Stone

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