7 things to ask before buying contractor insurance

Buying contractor insurance isn’t exactly the most exciting item on your to-do list. 

When you’re focused on winning contracts, meeting deadlines and keeping clients happy, insurance can feel like something you sort out once and forget about. But choosing the wrong policy could leave you facing some expensive surprises if things don’t go to plan. 

The challenge is that contractor insurance isn’t a one-size-fits-all product. The cover that’s right for an IT consultant might not suit a project manager, business analyst or engineering contractor. Policies can differ significantly in terms of what’s covered, what’s excluded and the level of protection they provide. 

The good news? A little due diligence goes a long way. 

Before you buy contractor insurance, here are 7 questions worth asking to make sure you’re getting cover that actually suits your business. 

Disclaimer: this is a general guide relating to insurance. Always check your policy documents and schedule for exact coverage details. If you’re unsure, always check with your insurance provider for confirmation. 

1. What am I trying to protect myself against? 

Before comparing policies, take a step back and think about the risks that come with the work you do. 

After all, not all contractors face the same challenges. An IT contractor working with sensitive data will have different concerns to a management consultant advising senior stakeholders or an engineer delivering technical expertise on a major project. 

Taking time to identify yours will help you find contractor insurance that can cover the realities of your work rather than paying for a policy that can’t react when you need to make a claim. 

Ask yourself: 

• Could a client claim that my advice caused them financial loss? 

• Do I handle confidential or sensitive information? 

• Am I working on high-value projects? 

• Is there a chance I could cause third-party property damage? 

• Do I have the means to handle contract disputes? 

• Can my business cope financially if a client doesn’t pay an invoice? 

• Can I afford time off if I have an accident while working or get summoned for jury duty? 

• Could my business cover the legal costs if I have to defend a claim? 

• Do I employ anyone/am I legally required to hold employers’ liability? 

The clearer you are about your risks, the easier it becomes to find cover that’s genuinely relevant to your business. 

2. What insurance do clients need me to have? 

Many contractors might not think about client requirements until they land a new opportunity and read through the contract. 

It’s not uncommon for clients to contractually require contractors to hold specific types of insurance with a minimum level of cover before work can begin. The most common insurance requirements are public liability insurance and professional indemnity insurance, though it can vary across contracts. 

Failing to meet these requirements could delay a project or even prevent you from securing the contract altogether. 

If you’re a growing business, you should also keep in mind that as you expand, your insurance coverage needs to keep up too. So, if your goal is to start working with higher-value clients, make sure your policy has the option of higher cover limits should you need it. 

3. What does the contractor insurance policy actually cover?

“Contractor insurance” is often used as a singular product name. It’s actually a term that refers to a package of business insurance policies designed to include suitable cover for contractors. 

Insurers will offer their own package of ‘core’ covers which are included as standard, with some policies only offered as optional add-ons. 

So, you need to pay attention to what’s actually included – don’t just assume that every insurer offers the same ‘standard’ coverage. 

It’s common for contractor insurance packages to include public liability insurance and professional indemnity insurance as a starting point. But, if you need further protection against other potential claims (like personal accident cover or cyber insurance), you need to make sure it’s either included or available as an add-on. 

4. What isn’t covered? 

Potentially one of the most important questions on this list, don’t overlook what isn’t covered before taking out contractor insurance. 

When you’re shopping around online for anything, websites will focus on telling you what you get for the price. Which makes sense – you want to know what you’re paying for. 

The same goes for insurance. But don’t forget to check what the policy excludes – this will tell you more about if it’s suitable for your business’ circumstances. 

For example, some policies may place restrictions on: 

• Overseas work 

• Fire safety claims 

• Certain contractual liabilities 

• Work with hazardous materials (e.g. asbestos) 

• Activities outside your declared business scope 

• Equipment stored at an uninsured location 

The last thing you want is to assume you’re covered, only to discover otherwise when trying to make a claim. 

If anything in the policy wording seems unclear, don’t be afraid to ask questions. Your insurer or broker should be able to explain how the cover applies to your specific situation.

5. Do I employ anyone?

Employers’ liability (EL) is a legal requirement if you employ anyone – that includes full-time staff, part-time workers, and apprentices and trainees (if they’re paid). 

There are some requirements and exemptions of employers’ liability that can apply, but on the whole most businesses who employ staff legally need it. 

So, if you do employ anyone and aren’t exempt, make sure your contractor insurance policy includes EL.  

6. What happens if a claim is made after work ends? 

Risks don’t necessarily disappear when you finish a project. In reality, claims can emerge long after the work itself has been delivered and you need to make sure you can be covered. 

In particular, check your professional indemnity (PI) insurance. It typically acts on a claims made basis but only as far back as your retroactive date (and providing you’ve maintained continuous PI cover). Check when your retroactive date is – this will determine which previous projects might be covered. 

If you’re changing insurers, make sure your new one confirms they can honour your existing retroactive date. 

If you’re unsure if an incident is covered, it’s always best to contact your insurer to check. 

7. Have I looked beyond the cost of insurance?

Let’s be honest. Cost matters. 

Most contractors want a policy that offers good value and there’s nothing wrong with prioritising price. You just need to make sure you compare insurance quotes properly – choosing insurance based solely on its premiums can be a costly mistake. 

A cheaper policy may come with: 

• Lower cover limits 

• More restrictive exclusions 

• Reduced flexibility 

• Fewer policy features 

Instead of asking “which policy is cheapest?“, try asking: “Which policy gives me the best balance between protection and costs?“ 

That small shift in mindset can lead to a much more informed decision. 

A final checklist before you buy 

Before committing to a contractor insurance policy, make sure you can confidently answer these questions: 

✅ Have I identified the key risks facing my business? 

✅ Do I understand the types of insurance I need? 

✅ Will the policy meet client requirements? 

✅ Have I reviewed the exclusions carefully? 

✅ Will I be protected against future claims for past work? 

✅ Am I choosing value rather than simply the lowest price? 

Finding the right insurance 

Buying contractor insurance can feel like just another administrative task, but it’s one of the most important decisions you’ll make as an independent professional. 

At Kingsbridge, our in-house experts can talk you through your insurance options and make sure you get the right cover for your business. 

Our own Contractor Insurance policy can include Public Liability Insurance, Professional Indemnity Insurance, Employers’ Liability (where required) and Personal Accident cover as standard. It’s also flexible, with optional add-ons like Cyber Liability, Legal Expenses and IR35 Insurance, so you can get the cover you need in once place. 

Interested in a quote or have some questions about contractor insurance? Get a quote online in seconds or give us a call to discuss your needs on 01242 808 740. 

Contractor insurance FAQs 

What insurance does a contractor need? 

The insurance a contractor needs depends on the type of work they carry out, the risks they face and any client requirements they need to meet. Many contractors benefit from public liability insurance and professional indemnity insurance. For those with employees, it may also be a legal requirement to hold employers’ liability insurance. Additional cover, like legal expenses insurance might also be worth considering based on your business needs. 

What’s the best business insurance for contractors? 

There’s no single “best” contractor insurance policy. The right cover depends on your profession, the projects you work on and the requirements of your clients. Rather than choosing the cheapest policy, it’s important to compare cover limits, exclusions, optional extras and support to find protection that suits your business. 

How much does contractor insurance cost? 

Contractor insurance costs vary depending on factors like your occupation, turnover, experience, claims history and how much cover you need. Business insurance with higher cover limits or additional protection, like cyber insurance or IR35 insurance, will typically cost more. Comparing quotes can help you find the right balance between protection and price. 

Do subcontractors need their own insurance? 

In short, many subcontractors may need their own insurance cover. But you should first determine if you’re a labour-only subcontractor or bona fide subcontractor, as each will face different insurance expectations. 

Labour-only subcontractors often work ‘under’ the main contractor and could be covered by parts of their insurance policy. Bona fide subcontractors are normally considered a ‘business’ in their own right and will typically need to hold their own insurance. We go into more detail in our subcontractor insurance guide. 

What does public liability cover for contractors? 

Public liability insurance can help protect contractors against third-party injury or property damage claims. For example, it may cover legal fees and compensation costs if a member of the public is injured or a client’s property is accidentally damaged while work is being carried out. 

What does professional indemnity insurance cover for contractors? 

Professional indemnity insurance can help protect contractors against claims that their professional advice, services or expertise caused a client financial loss. It can cover legal costs as well as compensation payments arising from allegations of professional negligence, mistakes, omissions or breaches of professional duty. Although it’s important to consider any contractually liability or policy exclusions that might affect coverage. 

How can I protect against loss of earnings from jury duty? 

Some contractor insurance policies can offer legal expenses cover, often as an optional add-on. This can provide financial support if you’re unable to work and earn an income while attending jury duty. It’s important to check your policy wording to understand what protection is available and any limits that apply. 

What is the difference between claims made and claims occurring insurance? 

Claims made insurance can cover claims that are made and reported while your policy is active, whereas claims occurring insurance can cover incidents that happened during the policy period, even if the claim is made later (subject to policy terms and your retroactive date). Professional indemnity insurance is typically claims made, while public liability insurance is usually claims occurring. Check out our guide to claims made vs claims occurring for more information. 

Do contractors need employers’ liability insurance? 

If you employ anyone, employers’ liability insurance is typically a legal requirement in the UK. Sole traders and contractors with no employees may not need it, but it’s important to check your circumstances and any contractual requirements before arranging cover. 

How much cover does a contractor need? 

The level of cover you need depends on your work, risk exposure and client requirements. Many contractors choose cover limits that meet contractual obligations while providing adequate protection against potential claims.