What types of insurance for contractors, consultants, freelancers and locums?
Contractors in every industry face risk on a daily basis. Thus it is essential to manage those risks by taking up the correct insurances.
There are a range of insurances that a contractor can take up to ensure that their business runs smoothly. To choose the right insurance it really depends on the business type, structure, size and industry. Some forms of insurance are compulsory for contractors. The best way to find out what insurances are right for your business is to speak to a qualified financial planner with an AFS license.
Here is a table of insurances and relevant information:
|TYPE OF INSURANCE||DESCRIPTION||RECOMMENDED FOR THESE CONTRACTOR INDUSTRIES||COMPULSORY?|
|Public Liability||Protects you against financial risk of being found liable to a third party for death or injury, loss or damage of property.||Construction and tradies||No, but is a requirement for certain industry associations.|
|Asset insurance||Protects your business equipment, Inventory, tools of trade, office furniture or computer equipment.||Any industry heavily reliant on equipment||Yes, for motor vehicle.|
|Workers Compensation||Compensation to protect against financial hardship as a result of injury, illness or death in the workplace.||All||Yes, if you are an employee of your company or you employ employees.|
|Professional indemnity insurance||Helps professionals cover the cost of litigation due to the breaches of contract or mistakes providing a service.||IT, Accounting, Consultants, Medical, Health, Designers||No, but is a requirement for certain industry associations.|
|Tax Audit||Covers you for the cost of fees in the event of a tax audit or investigation into your business by a government body.||No|
|Income protection||Covers part of your normal income if you are prevented from working through sickness or accident.||No|
|Life Insurance||Provides a lump sum or series of payments for you, your partner, or your dependents if you die or in some cases, if you are permanently injured.||No|
Please note that every effort has been made to ensure that information provided in this guide is accurate. You should note however, that the information is intended as a guide only, providing an overview of general information available to contractors and small businesses. This guide is not intended to be an exhaustive source of information and should not be seen to constitute financial advice. You should, where necessary, seek your own advice for any financial issues raised in your business affairs.