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Cheap Public Liability Insurance - an urban myth?

When you first start your own limited company as a freelance contractor, there are a number of important considerations that need to be addressed before you even consider stepping foot inside a client's premises.

After spending money on accountants, legal stationery and perhaps even a company website, the idea of cheap public liability insurance will probably appeal to most. 

When we talk about insurance, most contractors immediately think professional indemnity or PI insurance. In practice, of course, probably the first and most important policy you'll need to arrange will be public liability insurance.

So after you've spent the lion's share of your company start up reserves, you may be pleased to know that most brokers will be able to provide cheap public liability insurance for your limited company. Or to put that another way, a cheaper public liability insurance quote than you may have expected.

Public liability insurance usually goes hand in hand with employer's liability insurance, but not everyone necessarily needs the latter. If a contractor owns more than half of their limited company, and is the only employee, they are under no obligation to take out employer's liability insurance - this is something that needs to be mentioned when speaking with a broker.

When looking for cheap public liability insurance, it is important to keep in mind what the policy will actually provide cover against. In most instances, this type of insurance will cover the cost of any damage a contractor may inadvertently do to a member of the public (hence the name) or to goods and equipment owned by a member of the public.

It may be surprising to hear, but contractors can often get a cheap public liability insurance policy that will cover millions of pounds in damages for about £100 per annum. For those who work in a limited company with no or few employees, the annum premium can be often be lower.

Many public liability insurance providers have a uniform policy that they apply to any and all companies wanting such cover. As a freelance contractor, you should always inquire as to the specific coverage of the policy. An IT contractor, for example, has little need for cover related to falling from great heights (in most cases).

By asking some basic questions about a policy, you can often gauge whether or not you're paying over the odds for items you simply don't need insurance against. Every freelance contractor should, as a matter of safety, obtain public liability insurance - but there is no need to pay more than you need to.

If you wish to be contacted about public liability insurance, please request a call back from one of our financial advisors.

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