As the impact of the pandemic continues to disrupt businesses, creating ongoing uncertainty, limited workload and, in some cases, temporary closure, it's important to ensure you and your business are still protected against potential risks.
If you're managing a reduced income, you may feel insurance is an unnecessary financial burden. But there are essential covers you need to have as a contractor – some are a legal requirement or a condition of your NICEIC registration.
Employers liability
If you employ staff – either on a full or part-time basis – and even if they're under contract but are not currently working, you're legally required to have this cover in place. In fact, you could face fines of up to £2,500 a day if you don't have this cover in place.[1] You are responsible for your employees' safety while they are at work and don't get sick or injured because of the work they do for you. Employers liability provides cover for legal defence costs and compensation if an employee is injured or falls ill at work. Read more about what employers liability insurance covers here.
Public liability
This cover protects you if a customer or member of the public claims against your business for an injury or physical property damage. For instance, if an injury is caused by faulty wiring that you installed, this policy can cover legal costs, as well as compensation payouts you are liable for.
Efficacy cover
Also known as 'failure to perform' cover, if you are found liable for injury to third parties or damage to third party property when a product or service you supply fails to perform its intended function, efficacy cover protects you from any losses. For example, if you have fitted an alarm or sprinkler system that failed to operate in the event of a fire, the client could then claim the value of any of the damaged goods or property from you. With NICEIC Insurance, we provide £100,000 efficacy cover as standard.
Professional indemnity
Even the most experienced contractors make mistakes, but you could be held accountable if you provide inadequate advice or deliver a flawed design that leads to a financial loss. For example, suppose your electrical installation fails to work properly, causing the delayed opening of the business, which results in financial loss. In that case, professional indemnity will cover any legal costs and payouts you are required to pay. NICEIC Insurance cover historical work undertaken; however, you need cover at the time of a claim.
It's worth noting having professional indemnity cover in place could be a condition of a contract, for example, Private Rental Sector (PRS) work.
Personal accident cover
Imagine the impact on your business if you suffer a serious accident or illness (in your personal life or at work) and are unable to work. Personal accident insurance would help cover your monthly bills, giving you valuable peace of mind so that you can focus on your recovery.
Property, tools and vehicles cover
An incident occurring now could mean you have to stop work or delay jobs if you don't have insurance to help you get up and running again. The impact on your cash flow and your business could be devastating, so it's important to protect your buildings, stock, contents, tools, contract works, plant and vehicles.
With NICEIC Insurance Services, even if your premises are temporarily unattended or your vehicle is laid up, they'll still be covered – providing you follow any recommendations from your insurer.
Legal expenses cover
If you find yourself facing unforeseen legal costs relating to your property, employment issues or perhaps a contract dispute, having business legal expenses insurance in place could cover these costs.
In addition to this peace of mind, NICEIC Insurance can help you get expert legal advice before a problem arises.
Should a more serious legal problem occur – such as employment tribunals or commercial contract disputes – if a claim arises, your cover may include legal representation and legal expenses.
Having the right insurance cover in place is not just about financial protection - it's about protecting the reputation of your business. Contractors work can be broad, so you may also want to consider additional types of insurance.
Other types of insurance include:
- Contents insurance - if you have business premises, your equipment such as portable computers and phones are not covered by standard policies – you will need office contents insurance to protect your business property.
- Cyber insurance – it's likely you'll use technology to collect and store customer and supplier data. However, your business is constantly at risk of cyber threats, so cyber insurance offers valuable protection.
- Business interruption insurance - protects your company if an incident that's covered prevents your business from working effectively and impacts your earnings.
- Goods in transit insurance - covers your products or equipment whilst between jobs or out on deliveries.
- Contractors all-risk insurance – will protect your tools, materials and equipment when you're using them on-site.
- Contract works insurance - covers work that's underway on a site, and is designed to help cover the cost of repairing or redoing work that's in progress in the event it is damaged by an insured event like fire, flood, storm, vandalism or theft.
- Contractors plant insurance - covers the cost of replacing or repairing plant and equipment affected by an insured incident like theft, fire or flood – with cover available for both owned plant and hired plant.
FREE Business Insurance check
With so many types of cover to choose from, there is a risk you may be over-insured or perhaps arranged unnecessary dual insurance. Our FREE no-obligation business insurance check will compare the cover, service and price you're getting with what we can provide. As well as identifying if you're missing out on valuable enhanced benefits – we may potentially save you money too.
If you need to speak with us, please call the NICEIC Insurance team on 0333 015 6629.
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