professional indemnity insurance for contractors

Written By: Ray Sondeo on November 12, 2011 No Comment

professional indemnity insurance for contractors

Article by John Corr

As the types of jobs and professions are on an every day increase in the world, the number of people who need professional indemnity insurance, and the range of professions, which consider business professional liability insurance indispensible, are also steadily on the rise.

An IT contractor or information technology contractor is an IT professional who works for a client in his independent capacity. He performs under the rules of a working agreement with the client, who employs him for a certain period of time. Of late, this has become one of the professions where professional indemnity insurance is becoming increasingly important. The IT contractor may work independently or together with the client’s existing team. In both cases he provides guidance and support which is relied upon by the client for making business decisions. As such, in whichever way he works, business professional liability insurance is an absolute requirement for him.

professional indemnity insurance is important because the type of the job is such that the client could make crucial decisions based on the advice being given to him by the IT contractor. If acceding to his advice results in any financial loss, the client is bound take umbrage at what had happened and would hold the contractor liable. While this need not necessarily be a common pattern of things, the problem is that when it happens, the repercussions can be pretty bad. The contractor might have to defend himself in the court during prolonged litigation, and also might have to pay a huge amount as compensation, if the court considers the complainant’s claim true. In short, the contractor might end up paying an arm and a leg for a tiny error he made. That is why business professional liability insurance becomes so crucial to his proper functioning.

business professional liability insurance is not a protective cover just for the contractor. It is required as much for the security of the client as for that of the contractor. This is evident from the fact that many clients are insisting that the contractor must have professional indemnity insurance to sign the contract with them. professional indemnity insurance is increasingly being seen as a sign of professionalism. It is seen as a measure of the contractor’s devotion to duty and his eagerness to compensate the client if anything goes wrong. The nature of an IT contractor’s job being what it is, a wrongly typed code is enough to result in a huge mistake. Possibility of loss of data is another factor that puts an IT contractor at risk in his profession, making professional indemnity insurance a strong refuge against probable pitfalls.

Membership in professional organizations makes an IT contractor eligible for discounts in professional indemnity insurance. For example, a full membership in the organization Contractor Alliance makes a contractor eligible to 20% discount on premium. There are different ranges of covers to those at different income levels. Premium payable for professional indemnity insurance for contractors can be ?165 per annum or above, though the amount can be influenced by many things like the exact nature of the operation and whether the contractor works through an agency or directly with the client.

Whether he is an IT contractor, or engineering contractor, a contractor is strongly recommended to have a business professional liability insurance to have his business running smoothly.

If you require Professional Indemnity Insurance Cover or require assistance in finding Professional Indemnity Insurance for Professionals or Specialists or you need to find a business specialist to assist you Business Liability Insurance for Management Consultants please do visit our site. Our service is FREE for all business owners, as well as for consultants, advisers, freelancers, contractors, agents etc.

John Corr is an eBusiness advisor based in NE UK and writes on Business Indemnity and Business Insurance for Professionals