About this group
Getting insurance as a contractor in the UK is complicated and often expensive; and we want to change that.
We're starting with Professional Indemnity Insurance. Current PI Insurance policies are inflexible, and often inconvenient to arrange. Already we've used the collective buying power of this group to negotiate a discount on Professional Indemnity Insurance which can be bought online and "hibernated" when you are out of contract. Please join the group to find out more.
Our next objective will be to make it easier for contractors to arrange the protections against accident and sickness which corporate employees enjoy as part of their benefits packages. This currently involves a mix of income protection insurance, critical illness insurance, family income benefit, and life assurance - which is unnecessarily complicated.
Finally, we want to tackle health insurance. The only reason health insurance is more expensive for contractors than for corporate employees is that contractors lack the buying power of large organizations - and therefore have to pay a staggering premium on health insurance which effectively subsidizes members of corporate schemes.
The aim of this group is to make IT Contractor insurance better by enabling contractors to leverage their collective buying power. So if you know other IT contractors who would benefit from this, why not invite them to join too?
Top questions answered by us
Which contractors can join this group?
Anyone who contracts in an IT or IT related role, such as Software Developer, Enterpise Architect, Solution Architect, Business Analyst, Project Manager, Programme Manager, Testing or QA Lead, Test Analyst, Systems Analyst, UX Designer, Information Architect, Graphic Designer, Development Manager, Business Architect, Change Manager, IT Consultant
What is policy hibernation?
Professional indemnity insurance is a complicated beast and cancelling it might not be for the best. That's because it's a 'claims made' policy. For a claim against you to be covered, your insurance has to be in place continuously, and at two specific points: when you did the work and when the claim is made.
Put simply, claims made after you've cancelled your policy aren't covered – even if they relate to work you did before you cancelled it.
But, if you're between contracts, you don't want the expense of a full-blown policy; even if you do want the protection it provides. So what can you do?
One answer is policy hibernation. It works like this:
- Your insurance is put on hold
- Your premium is halved
- Your past work is still covered
What is Professional Indemnity Insurance?
Professional Indemnity Insurance (or PI insurance) is designed to cover the cost of negligence claims made by a client against a contractor. It is common practice for organisations who employ contractors to insist that you have PII, in case something you do while working for them goes badly wrong and results in legal action against you. Some companies insist on seeing a certificate of professional indemnity insurance before they will allow you to start work as a contractor, while others will accept a declaration that you have professional indemnity insurance in place. The amount of professional indemnity insurance cover required varies, with some organisations demanding as much as £5m.
What other insurances do IT contractors need?
In addition to professional indemnity insurance, IT contractors are often asked to have public liability insurance. The purpose of this is to cover legal claims from members of the public for financial loss, injury, or death. If you have any staff, you are also legally obliged to have employers liability insurance, in case your employees suffer an accident or illness as a result of work.
Public liability insurance and employer's liability insurance are often bought by IT contractors as a bundle.
Community questions and answers
As I have been a contractor for quite a while and I will be continuing to do so for the foreseeable future I decided to take out an ASU policy to cover myself in the event that i wouldn't be able to work. I took it out with the bank and was assured that in the event of becoming unemployed the benefit (in my case £24k pa) would pay out until I found another contract, however this simply wasn't the case. After a lot of tooing and throwing it became apparent that these policies are totally obsolete for what us contractors require. Cheers Jack