Working as a IT Contractor or IT Consultant is a massive draw for a lot of workers from the information technology industry sector.

IT can be an extremely lucrative sector for contractors, and with the continual developments in technology it is a sector that continues to grow rather than slow down.

One key thing to remember is when you work for yourself is that you do not have the same level of protection that being a full-time employee offers you.

So it is important you carry comprehensive business insurance to protect you from the unexpected. The key policy recommended being Professional Indemnity insurance (PI).


What is Professional Indemnity insurance?

If you offer professional advice, services or designs that are deemed incorrect and your client suffers a financial loss, they could make a claim against you.

PI insurance will cover the costs of your legal defence costs if a client takes legal action against you. For professionals offering advice and services in the UK, it is widely seen as an essential insurance policy to carry.


What does PI insurance cover?

It’s important to remember that PI will only cover you for making a mistake.

If you are negligent in your work, or you promise something to a customer that you can’t deliver, professional indemnity insurance can cover you for mistakes including professional negligence, unintentional breaches of copyright or confidentiality, Data Protection Legislation Prosecution defence costs and loss or damage of documents.


Do I need PI insurance?

Even though PI is not a legal requirement, it is highly recommended and in a lot of cases clients won’t even consider engaging you if you cannot prove you have the correct insurance cover in place.

From that point-of-view Professional Indemnity insurance can be viewed as a sound business investment for freelancers, contractors and SMEs alike.


You could be liable for thousands of pounds if you offer advice or a service which leads to your client losing money. If you carry out any of the following business activities, you should consider professional indemnity insurance.

  • Offering advice or professional services to clients as a contractor or consultant
  • Providing designs as a designer, architect or engineer
  • If a client requests that you take out professional indemnity insurance.
  • Part of an industry regulator or professional body that requires insurance coverage to be a member.


Professional Indemnity insurance is not prohibitively expensive, but your premium will depend on your occupation, the level of cover you require and the excess on the policy.


For further information and a quote please contact our friendly award-winning team on 0161 833 2100