IT Contractor insurance
Find out what type of IT contractor insurance you need and what's included in the cover.
What is IT contractor insurance?
IT contractor insurance is business insurance for IT contractors.
Cover varies by provider and depends on personal requirements, but will usually include professional indemnity insurance and cover for equipment.
Why do I need IT contractor insurance?
Whether to get insurance for IT contractors is your choice, as it’s not a legal requirement. However, it is highly recommended, particularly to protect yourself against liability claims, that can reach very high amounts in settlements.
It would also be a good idea to cover your equipment against damage and theft, as you rely on it to work.
IT contractor insurance policy details
- Cyber liability insurance. As an IT contractor, it’s likely you do a lot of your work online. You might also store data and files in the cloud. Unfortunately, this leaves you vulnerable to data breaches from someone hacking your computer or simply stealing it and accessing the data directly. Cyber insurance protects you in case this happens and a claim is brought against you, and even helps with ransom demands from hackers. It also helps protect the data, to reduce the chance of a breach happening in the first place.
- Professional indemnity insurance. Professional indemnity insurance for IT contractors covers you against claims of negligence by clients. It can also include cover for breach of contract (in case you fail to stick to the terms of your contract, whether you are at fault or not) and intellectual property (in case a competitor accuses you of copying their content for your client’s website). The policy helps out with court fees and compensation payments.
- Public liability insurance. Whether you have your own office or not, you should consider taking out public liability cover. This type of policy protects you in case a member of the public is injured or their property is damaged and your business is legally liable. For example, if you cause damage to a client’s office in some way.
- Business contents insurance. If you have your own office, this type of cover is also recommended. Business contents insurance covers you if the items inside your office (like furniture, computers and other equipment) are damaged, lost or stolen. If you travel to see clients, look for contents insurance that includes cover for your items away from your premises. Note that if you run your business from home, you are unlikely to be covered under your regular home insurance policy. Find out more in our complete guide to home insurance cover when you work from home.
- Employers’ liability insurance. If you employ staff, you are legally required to take out employers’ liability insurance, to protect both your crew and yourself in case legal action is taken against you.
- Business interruption insurance. Business interruption cover can help compensate you for loss of profits if your business is unable to operate for a period of time for a covered event. This will vary by insurer but can include natural disasters, illness or a local emergency (such as police cordoning off the area).
Common claims examples
- Contract overrunning. If you are hired as a project manager to deliver a system to a specific deadline and the project overruns, you can be held responsible for the additional costs caused by the delay. Having professional indemnity insurance in place can help with this, as well as your legal costs.
- Accidents in the workplace. You are doing some work in a client’s office and one of their employees trips over a wire you are using to power your equipment. Public liability cover can help you with legal expenses and any compensation payments you might have to pay.
- Theft of equipment. Your office or home is broken into and the equipment you use for your work is stolen. Even if you work from home and have home insurance, it might not cover you for any items used for business purposes. Business contents insurance (sometimes known as business equipment insurance) can cover your equipment against damage, loss and theft at home, in the office and in transit.
What cover limit do I legally need as an IT contractor?
The only type of insurance that is a legal requirement is employers’ liability insurance, if you employ staff.
All the other bits of cover that make up insurance for IT contractors are not a legal requirement, but are highly recommended.
That said, some companies and even individuals will require you to take out IT contractor insurance to secure a contract with them.
How much does IT contractor insurance cost?
The cost of cover will vary by provider and the specifications of your policy.
To give you an indication, prices from our partner Superscript start at £5.13 per month for the Essential policy, and £7.58 per month for the Professional policy.
The best way to find the best deal for you is to shop around and compare policies. Remember that cheapest isn’t always best, so make sure you take out sufficient cover for your needs.
What other types of business insurance does an IT contractor need?
Finder’s insurance expert Ronny Lavie answers
The main types of insurance recommended for IT contractors are listed above, but you might want to add legal expenses to your policy, to cover any additional expenses in case you have to go to court.
If you have an office that you own, you should consider adding buildings cover to your contents insurance policy, if you have one. Contents insurance covers the interior of the premises, including your computer equipment, while buildings cover pays out to repair and replace things like fixtures and fittings, as well as the exterior of the building (like the roof and windows).
If you rent your premises, your landlord may have this cover in place already, but make sure to find out from them what’s included.
Note that if you use your car for work purposes, you’ll have to let your car insurer know, as they might exclude this from your cover.
Frequently asked questions
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