If you’re an independent contractor or consultant, you’ll know that having adequate business insurance is crucial. What happens if a client decides to take you to court because of financial loss they incurred or interruption of services caused by your negligence? Are you covered?
If a client claims that you haven’t fulfilled your professional obligations then they can submit a claim for damages against you, which could run into tens of thousands of pounds. If you don’t have appropriate professional liability insurance then your business could be seriously damaged financially. Even if you win your case, bankruptcy is a real possibility simply because of the huge legal costs involved defending yourself against the claim.
If you’re a technology or IT consultant for example, you could be more susceptible than others because the industry is so new – laws are still being defined and introduced and this lack of understanding of the law means you could encounter unscrupulous clients who try to sue just because they can, even though your solution works as you said it would.
Errors & Omissions Insurance
You may have heard this term, or seen it on many publications or web sites as ‘E&OI’. Errors and omissions insurance is a form of professional indemnity insurance that could be a vital purchase for any independent contractor. Imagine the impact of a missed typing error, a misprint on an important document, or a missing section of a manuscript - a simple oversight can be all it takes for a client to sue you.
A standard commercial general liability policy does not usually include errors and omissions insurance cover so make sure you take out a policy that has all the features and optional extras that your business needs to be fully protected.
In today’s litigious world your business is exposed to all manner of risks, so it pays to have the best and most comprehensive cover you can afford. For more information on professional indemnity cover for consultants, read our business insurance guides or compare quotes now with Policy Expert.