You’d be surprised how many times we hear from contractors who assumed that they had the right levels of contractor insurance in place but were, in fact, under insured. Of course, this often only came to light at the time when they needed the correct levels of cover the most – when they were making a claim.

Often people operate under the assumption that just having some kind of insurance cover in place is enough. After all, how many people actually claim on their insurance policy? The answer, it seems, is quite a few.

Having inadequate cover might keep monthly (or yearly) premiums down but it becomes a problem when a claim is made against you because of a mistake you made and you don’t have enough insurance to cover it. In such a situation it’s very likely that you’d end up footing most of the bill yourself. We’ve spoken to contractors in similar situations who’ve ended up burning through their savings, selling their homes, giving up their businesses or, in a few cases, declaring bankruptcy because they can’t make the payments.

The lesson here? Always make sure you have the right level of contractor insurance with appropriate limits. Read on below as we explain how you can find out what your limits should be.

If you work through an agency, they will often stipulate insurance limits in your contract. It’s often the same case for many clients. When you have guidance along those lines you should go with the amounts specified in your contract.

But what if you are not contractually obliged to have contractor insurance in place? It’s still possible for you to work out the limits you require. You need to consider how much the project is worth in monetary terms to your client and how much it could cost them if delays occurred or mistakes were made. Add in any potential legal fees as well and ensure you’re covered for that amount or more. Depending on your sector, it wouldn’t be unusual for this amount to go into the millions.

If you don’t have the right limits in place a quick call to your insurance provider will help – you will always be welcome to purchase more insurance. However, if there are any problems (e.g. your provider is already insuring you at their top limit) you will need to consider switching your contractor insurance provider to one that will give you the cover you need.

Kingsbridge offer generous limits on their insurance policies. Their Professional Indemnity cover is for £1 million any one claim, with Employers’ Liability cover set at £10 million any one claim, and Public Liability cover set at £5 million any one claim, all as standard. This easily fulfils what is required by most agencies or clients, and should be enough cover for most contractors in most industries.

If you want to get in touch, simply give them a call on 01242 808740 or take a look at their website for more information.

Guest blog by – Kingsbridge Contractor Insurance