As a self-employed Contractor, it seems like there’s a whole lot to worry about, from securing your next contract to getting the job done properly - not to mention the day-to-day admin of running a business. 

‍But one thing you should not have to worry about? The financial fallout from unexpected events.

‍That’s where business insurance comes in. The right cover can be the difference between bouncing back from a mishap and facing a major financial headache.

‍We’ve joined forces with the experts at Qdos to break down seven essential insurance policies for contractors and why they matter.
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1. Professional Indemnity Insurance (PI)

What is it?

Professional Indemnity insurance covers you if a client claims you’ve made a mistake (sometimes referred to as an ‘error or omission’ in the insurance world) in the course of your duties, and they’ve suffered a financial loss as a result. The policy will cover your legal fees in defending yourself, as well as any compensation payments if you are found to have been negligent.

Why does it matter?

Everyone makes mistakes. But in the professional world, even a small error such as a bug in code or a faulty design can cost your client big money. PI insurance protects your business from the legal and financial fallout if things go wrong.
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2. Public Liability Insurance (PL)

What is it?

Like Professional Indemnity, Public Liability covers you for legal disputes made against your business. Public Liability covers you against legal liability to a third party if you’ve caused (or are alleged to have caused) injury or property damage while providing your services. The third party doesn’t have to be a client, they could also be a member of the public.

Why does it matter?

PL is not legally required for most contractors, but many clients and trade associations will insist on it, especially in higher risk industries. Accidents happen, and this cover protects you from costly legal disputes and the stress that comes with them.
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3. Employers Liability Insurance

What is it?

Typically bought alongside Public Liability, this insurance protects you against legal fees and compensation costs if an employee suffers injury, illness or accidental death caused by their employment with you. As a general rule of thumb, if you’re an employer, Employers Liability will be a requirement under UK law. 

Why does it matter?

Even in a careful workplace, accidents can happen. Compensation claims can run into millions, and the government will fine businesses which fail to maintain cover where they are legally required to do so. This is not just a legal must, it is peace of mind for you and your team.
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4. Crunch Protect 

What is it?

Crunch Protect is your business’ safety net when you need it most. It protects against key risks like HMRC investigations on Self Assessment, Corporation Tax, IR35 compliance, VAT disputes, and VAT or PAYE inspections and disputes, with expert support every step of the way. For just £6+VAT a month or included free in Limited Company Premium packages, it’s affordable and brings peace of mind.

What does it matter?

HMRC investigations can throw your business into chaos, with accountancy fees often reaching £5k or more. Crunch Protect ensures you are never alone and lets you focus on your work while our specialists guide you through the process. It is not just a tax investigation service; it is a shield against unnecessary stress and gives you confidence that your business is protected when it matters most.
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5. Income Protection Insurance

What is it?

If you’re self-employed and need to take time off work due to illness, then your income may stop overnight. This policy provides a monthly benefit in the event you’re unable to work for up to a year, as well as a lump sum in the event of accidental death.

Why does it matter?

While it’s not a nice topic to think about, planning for the future if you’re ill or suffer an accident is an important consideration for the self-employed. Without sick pay, having Income Protection insurance in the event you’re unable to work ensures you still have a source of income should the worst happen.
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6. Business Equipment and Contents Insurance

What it is:

Covers your tools, equipment, and office contents if they are lost, stolen, or damaged.

Why it matters:

As a Contractor, your kit is your livelihood. If it is damaged or stolen, you could be left unable to work and out of pocket. This insurance keeps your tools covered so your business can carry on without interruption.
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7. Legal Protection

What is it?

This policy not only covers the costs if you find yourself in any of a number of legal disputes, such as contract disputes, employment disputes or debt recovery disputes, but also covers your lost income if you’re called up for jury service.

Why does it matter?

Jury service is your civic duty, but it can hit your wallet hard if you are self employed. Legal disputes can also pop up out of nowhere. This insurance ensures you are covered, so you will not be paying expensive solicitors.

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Why insurance is worth it

Insurance might not set your world alight, but when things go pear-shaped, it’s the best safety net you’ll ever have. Think of it as your business backup plan, so if the unexpected happens, you’re not left scrambling. Cover the essentials, and you can focus on the fun stuff again: finding clients, growing your business, and smashing your goals.

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