Most professions nowadays need some sort of insurance to protect them from the litigation minded public. Many professions need insurance to keep their livelihood viable. IT contractors are one profession that many people think do not need insurance. However this is false. Many people working as consultants need to have Professional Indemnity Insurance to protect their interest.
As an IT contractor, you are providing professional advice to your clients regarding their computers systems. Unfortunately, sometimes things do go wrong. Your clients can suffer losses that are a result of the advice you have given. In these situations they are entitled to make a claim against you. This would necessitate you obtaining legal counsel in order to guide you through this situation. Legal counsel can be quite expensive. These fees can often bankrupt a consultancy business. However if you have taken out of Professional Indemnity Insurance policy then you will have coverage to protect your business. Sometimes the legal fees that you need are those to help settle the claim out of court. Another benefit to having IT contractor insurance is that it can also help pay for any damages. Many times courts can order the contractor to pay a significant amount of damages to the client. Again this amount of money could break the company. Sometimes the claims made by your clients can be valid. However, sometimes these complaints that are filed are indeed false. Even if the claim is false you’ll still need legal counsel to assist you.
Today when choosing an IT contractor, many potential clients prefer those contractors that have Professional Indemnity Insurance. They feel much more reassured when choosing them for their computer needs. Therefore by having this type of policy it can help obtain business for you. Also within the UK, Professional Indemnity Insurance is fully allowable against taxes.