Contractor Indemnity Insurance

If you are a contractor, then it is extremely important that you know about, and have, contractor indemnity insurance, also referred to as professional indemnity insurance. Without this particular type of insurance, if there is a negligence claim filed against you, you could be up the proverbial creek without a paddle, and it is going to end up costing you a lot of money. It is a lot safer to have the right insurance for your business. That way, you have the peace of mind of knowing that you are covered in any event. It may cost a little extra to have the insurance you need, but if you do not have it when you do need it, it is going to cost a whole lot more.

What Does Indemnity Insurance Cover?

If a client brings about a lawsuit asking for compensation as a result of negligence, you will be glad that you have indemnity insurance coverage. In fact, many of your clients will probably ask if you do have this coverage, and will insist that you have it before working for them. Some of the things that your professional indemnity insurance will cover include:

   - Any negligent action you may make while you are performing your job and any errors that you may make.
   - Any loss of data that you may have had placed in your care.
   - Libel or slander, as long as it is unintentional on your part.
   - Breach of confidence that is unintentional on your part.
   - Being dishonest with your clients (which of course you would never do anyway).

Things You Should Know about Indemnity Insurance

There are certain things that you should know about your contractor indemnity insurance. For example, you need to make sure that you have enough coverage. Typically, coverage starts at approximately $100,000, but it is best to get more if you can afford it, just to be on the safe side. It is better to spend a little bit more now than a lot more later if you are sued.

You should also learn about and get retroactive coverage, just in case something you did in the past comes back to haunt you later. You may even want to backdate your policy to the date when you started your business. You may also want to have run off coverage, which will protect you if you decide to change careers but end up with claims against your work in the future. There are also limitations to consider. Many insurers will limit various things, such as the maximum number of employees you can have.