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Professional Indemnity Insurance and its effects

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If you are a contractor it is important to protect yourself by taking out  good Professional Indemnity Insurance. This type of policy is considered essential to contractors  and is very affordable for the cover it provides. If a client is dissatisfied  and makes a claim against a contractor, it has the potential of financially  costing them very dearly. If during a contract, a contractor either accidentally  breached their duty of care, or unintentionally infringed someone else’s  copyright, or was dishonest or lost important data or documents, a dispute with  their client can arise. This Insurance will cover the cost of damages and for  fixing mistakes, as well as covering the cost of legal fees. It is one of the  most important insurance policies to have in place as a contractor.

Technically speaking, PI Insurance will protect a contractor against the cost  of defending claims where it is alleged that a client has suffered financial  loss as a result of their contractor’s error, omission or negligence. Basically,  the cover acts as a safety net for the contractor, covering the costs and  troubles of a potential claim made against them as a policy holder created as a  result of any mistakes that they may have made within the workplace. This is  deemed to be an essential policy for contractors as contracting can be regarded  as a high risk occupation, leading to increasing possibilities for professional  error. As well as providing obvious protection, this type of insurance policy is  commonly a contractual requirement on most contracts, therefore an essential  policy to be purchased. It basically protects a contractor’s professional  indemnity, giving a freelancer not only great and vital protection, but also  peace of mind in such a stressful and sometimes pressurizing line of work.

As well as obviously protecting a contractor’s professional indemnity, Professional Indemnity insurance also looks positive in the eyes of the HMRC with regard to contracts  and IR35 status. This is one of the huge benefits that the insurance cover  delivers as IR35 can be devastating to contractors who fall under the  legislation. In this case taking out the policy acts as a means to bolster a  contractor’s position as a limited company, therefore aiding their viewpoint  from the HMRC.

Professional Indemnity Insurance is a form of contractor cover that should never be overlooked.  No matter what professional field a contractor works in, claims of negligence  can be made against them, making the need for a PI policy adamant. Insurance is  important is all forms of business, and for high risk professions such as  contracting, a policy such as PI insurance is necessary in order to provide  complete peace of mind.

Contractors receive high earnings for their specialized lines of work, but  their self-employed status leaves them potentially vulnerable to claims and  assertions. These possible claims against a contractor can be very costly and  often devastating to their professional reputation. Professional Indemnity Insurance is a  contractor’s lifeline in these cases, as it covers all expenses and efforts  during a claim as well as taking the burden of any troubles and costs along the  way.

Article Source: http://EzineArticles.com/7288229

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The post Professional Indemnity Insurance and its effects appeared first on Dixons Commercial.


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