The benefits of public liability insurance for IT contractors 

By Bethan Harper on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

The landscape of the IT industry is ever evolving and, as a result, contractors face a unique set of challenges and risks. Therefore, as an IT contractor, safeguarding your business interests should be a top priority.

This is where public liability insurance comes into play.

Public liability insurance is a specialist form of insurance and not just an additional expense; it is a critical asset that can protect you from unforeseen liabilities and enhance your professional credibility.

Given the nature of IT work, where even a minor error or oversight could lead to significant financial loss or damage for a client, the importance of this insurance cannot be overstated. It provides a safety net that allows IT contractors to conduct their business with confidence, knowing that they are protected against claims that could otherwise derail their operations and financial stability.

In this article, we will explore the numerous benefits of public liability insurance for IT contractors in the UK, illustrating why it is an indispensable tool for safeguarding your business and reputation in this dynamic sector.

We’ll cover:

• What is public liability insurance?
• What does public liability insurance usually cover?
• Why do IT contractors need public liability insurance?
• How much does public liability insurance for IT contractors cost?
• What other types of insurance might IT contractors need?
• Where can I find public liability insurance?

What is public liability insurance?

Public liability insurance is a type of business insurance designed to cover legal costs and compensation claims if someone is injured or their property is damaged due to your business activities.

What does public liability insurance usually cover?

Policies can differ slightly from provider to provider, so what’s included in one won’t necessarily be included in another. However, overall, public liability insurance will typically cover claims against your business for:

• Any damage caused to someone else’s property as a result of your work
• Someone else being injured due to your work
• Accidental injury or damage caused by your employee(s).

For example, as an IT contractor, if while fitting new equipment at a client’s office you damaged the wall, you would be financially liable for any repairs. In this instance, your public liability would cover the costs (minus your excess).

Additionally, if someone else was injured due to your work (for example if someone tripped on a wire you were installing), you’d also be covered by your public liability insurance.

Why do IT contractors need public liability insurance?

If you’re an IT contractor who visits your client’s workplaces to install equipment/software or you have clients visit your office, you should probably consider public liability insurance.

What you might be surprised to learn is that an injury or damage claim could set you back thousands (depending on the extent of injury or damage caused) and without public liability insurance this could be financially devastating to your small business.

So, not only can this type of insurance give you peace of mind that you know where to turn should something go wrong at work, but you’ll also be covered financially.

Furthermore, having public liability insurance is often a prerequisite for securing contracts, as clients are increasingly requiring this protection as part of their risk management strategies.

How much does public liability insurance for IT contractors cost?

As we previously mentioned, public liability cover can differ depending on the provider you choose, and that goes for the price too.

However, to give you an idea of how much you could expect to pay, according to NimbleFins (2024), the average annual cost of public liability insurance (up to £1 million) is £106, whilst cover up to £2 million is £118.

What other types of insurance might IT contractors need?

Depending on the nature of your business (i.e. whether you have employees or not or keep stock stored in a warehouse or on your business premises), you might need to invest in other types of business insurance to ensure you’re fully protected.

Firstly, if you have any employees (whether they’re paid or not), you’re legally required to take out employer’s liability insurance. This policy will cover you if your employees or ex-employees develop a work-related illness or get injured on the job and they make a claim against you.

Additionally, if you keep stock or equipment either on your business premises or in a warehouse, it is usually worth considering stock cover or warehouse insurance, among others.

With so many types of business insurance to consider it can be confusing not only to choose the cover you need, but also to manage so many policies, and so you might want to consider commercial combined insurance.

Commercial combined insurance could take the weight off your shoulders as it allows you to purchase several coverage types under one policy and choose the ones that suit you best.

Commercial combined insurance typically offers the option to be covered by:

• Public liability insurance
• Product liability insurance
• Employer’s liability insurance
• Property damage insurance
• Business interruption insurance
• Personal accident insurance
• Goods in transit insurance
• Warehouse insurance

Where can I find public liability insurance?

You can get public liability insurance online from a range of policy providers on the market, and with so many options, you’re bound to find a policy that suits your IT contracting business.

If you’re interested in combined commercial insurance, SmallBusiness.co.uk can help you find the best provider for your needs using our quote tool. Simply fill in our form by answering a few questions about your business (it should take you less than a minute).

How important really is public liability insurance for IT contractors?

We asked Markus Schaal, a tech expert and the Managing Director & COO at PLITCH (the fastest-growing PC mod software company in the world).

Markus told us, “In today’s ever-changing technology world, contractors commonly find themselves working directly with clients or dealing with sensitive customer information, which increases the chances of possible issues. Public liability insurance acts as a backup plan, covering legal fees, payment for damages, and other costs tied to potential claims. It protects your business financially and also gives confidence to your clients since they know you’re ready to responsibly handle anything unexpected that could happen.”

“Investing in this protection displays your professionalism and dedication to risk prevention, which can be an advantage when trying to gain new projects. Having liability coverage in place shows others you take responsibility seriously and care about managing risk, something clients will value in the professionals they choose to work with.”

Read more

Public liability insurance: Why you need it – Here we’ll explain everything you need to know about public liability insurance.

Dealing with business insurance claims – SmallBusiness.co.uk provides points that could help you should you need to make an insurance claim.

Employers’ liability insurance – what is it and do you need it? – Here, we answer your questions about employers’ liability insurance.

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