{"id":7221,"date":"2021-05-05T08:40:29","date_gmt":"2021-05-05T08:40:29","guid":{"rendered":"https:\/\/coolcompany.com\/uk\/?post_type=blog&p=7221"},"modified":"2023-09-13T22:22:54","modified_gmt":"2023-09-13T22:22:54","slug":"mandatory-insurance-uk-contractors","status":"publish","type":"blog","link":"https:\/\/coolcompany.com\/uk\/blog\/mandatory-insurance-uk-contractors\/","title":{"rendered":"Mandatory Contractor Insurance Requirements in the UK"},"content":{"rendered":"\n
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Mandatory Contractor Insurance Requirements in the UK<\/h1>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n
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Choosing to be a contractor comes with many rewards and responsibilities, including understanding contractor insurance requirements in the UK, if that\u2019s where you want to work. Flexibility, higher earning potential, and independence draw many skilled professionals to contracting, especially those that value the freedom that comes with charting the course of their career.<\/p>\n\n\n\n

At the same time, there are numerous challenges that come with being \u00a0a contractor. Insurance is one way contractors can lower their operational risk. With so many types of insurance policies available, contractors can tailor their plan to cover unforeseen events like illness, accidents, extreme weather and property damage.<\/p>\n\n\n\n

This article summarizes what types of contractor insurance are available, which ones are mandatory, and what\u2019s automatically covered if you join an umbrella company<\/p>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n

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Mandatory Insurance Requirements for UK Contractors<\/h2>\n\n\n\n

Employer\u2019s Liability Insurance<\/strong><\/p>\n\n\n\n

Employer\u2019s liability insurance is a legal requirement in the UK under the Employer\u2019s Liability Act of 1969. It protects you in the event you become injured or ill while on the job and provides benefits if you can no longer work.<\/p>\n\n\n\n

Failure to obtain employer\u2019s liability insurance can result in serious repercussions. Possible fines include \u00a32,500 per day for being uninsured in addition to \u00a31,000 if you either fail to provide proof or refuse to make it available to inspectors upon request.<\/p>\n\n\n\n

Employer\u2019s liability insurance is not legally required in some cases. Self-employed contractors or those who own a single-person limited company with more than a 50% capital share do not require insurance. Companies comprised strictly of family members and equal partnerships with no other employees are also exempted.<\/p>\n\n\n\n

Umbrella organisations like Cool Company cover all employees with employer\u2019s liability insurance, ensuring everyone is protected from illness and injury on the job.<\/p>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n

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Optional Insurance for UK Contractors<\/h2>\n\n\n\n

Professional Indemnity Insurance<\/strong><\/p>\n\n\n\n

Professional indemnity insurance \u2013 also known as PI insurance \u2013 covers you in the event a client claims your work has caused them financial or reputational loss resulting from:<\/p>\n\n\n\n