When looking back over a professional year, 2012 proved especially hectic for limited company contractors with their profession being dramatically affected for a number of reasons. Several changes were made, including duty laws being altered, and the ever ominous presence of Her Majesty's Revenue and Customs (HMRC) caused the expected commotion regarding tax and professional status. Because of this, and as a result of a clear rise in contracts themselves, IR35 took centre stage. Thus the importance of sufficient contractor protection became vital.
Contractor protection can come in many forms, but when it comes to securing professional indemnity or protecting limited company finances, insurance is very much the crme of the crop. Contractor insurance obviously covers the costs and troubles that contractors may incur as a result of any misfortune or mistake caused professionally, and can often act as a way in which they can land contracts successfully.
Due to increasing activity and competition amongst the contracting community, sustaining sufficient contractor safety was essential, and although most contractors will make financial stability their prime motive, in a year of such a busy market, things are often put aside. Because of this, 2012 proved especially necessary when it came to contractor insurance, the added competitive element and unstable nature of tax making proper cover important to limited companies.
Information obtained by the Association of Professional Staffing Companies (APSCo), shows that the number of contract based positions increased by 4% in 2012 with permanent positions being reduced by 2% to make way for limited company contractors. As a result of this, the number of contracts and contractors grew rapidly last year, making the market rife with limited company professionals.
As a direct result of a greater demand for contractors being seen throughout businesses and firms, more and more PAYE employees are considering moving over to limited company status thus creating room for potential errors or mistakes regarding insurances. Contractors are company owners, and therefore must sustain the upkeep and pay-outs of a proper business, and this can often be forgotten when turning to limited companies. With a jobs market rife with contracts and temporary positions, the need for proper insurance cannot be overlooked, and due to aspects such as mandatory cover policies and contractual obligations, a rise in insurance products is most definitely imminent.
Contractor insurance may well be a subject, let alone a financial decision that most contractors dread, but in spite of this its importance must be understood, and contractors should be well aware of the effects of improper or none existent insurance. Insurance obviously covers almost any eventuality in life, and small business cover provides the sufficient protection that is needed in such a busy professional environment. As protection, business insurance can cover whole firms, but contractor specific products obviously hone in on the smaller individual limited company, making each policy tailored to the contracting profession. From professional indemnity to travel and sickness insurance, there are policies that cover almost any eventuality that self-employed professionals face to ensure they are completely protected.