Professional Indemnity Insurance for Contractors

Caroola is proud to work with Hiscox and offer our clients a 20% discount when they purchase a business insurance product through Hiscox.

Prices start from just £25 a month (plus insurance premium tax), for terms and conditions visit

Whether you are a contractor or freelancer working from home or a client’s site we are sure our partner Hiscox has a range of products you can tailor to suit your needs. The organising cover couldn’t be easier; you can get quotes, purchase cover and receive policy certificates via email.

Professional indemnity insurance meets the cost of defending claims and damages payable should a client suffer financial loss due to any negligent act, error or omission by a contractor. For example, if you’re a contractor developing software and as a result of your actions there is a delay in its delivery, it is highly likely your client will demand considerable compensation from you. Professional indemnity could cover the cost of such a claim.

Contractors and Freelancers – Do you need Professional Indemnity Insurance?

Working for yourself carries certain obligations and responsibilities. You may need professional indemnity insurance if you:

  • provide expertise, skills or advice to clients
  • have access to clients’ confidential information
  • produce materials that could cause offence or infringe intellectual property rights
  • provide a professional service and could be challenged on your work.

You may feel confident in the quality of your work, but any contractor or freelance business is vulnerable to a claim of negligence when professional advice or services fail to meet a client’s expectations and cause financial loss.

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Why choose Hiscox Professional Indemnity Insurance?

  • Select from a range of cover levels to get the protection your business needs.
  • They offer a range of industry-specific policies to suit the risks you face in your particular profession.
  • With no administration fees, contractors and freelancers can amend their professional indemnity insurance policies as their business circumstances change.
  • And if you want the peace of mind that your professional indemnity policy will provide cover for similar work undertaken in the past, Hiscox can offer you retrospective cover as well.
  • Hiscox has been named Best Small Business Insurer for eight years running (Source: Start Your Business Magazine)

Professional indemnity insurance quotes are available online or by phone, on 0800 2800 358 or visit

You can pay for your policy annually or by interest-free monthly Direct Debit instalments.

Professional Indemnity Insurance FAQs

What is Professional Indemnity insurance?

Professional indemnity insurance – also known as PI insurance – covers against claims in relation to mistakes or negligence in your work. It is also used to cover any expenses incurred in your defence.

Do I need Professional Indemnity insurance?

Anybody who provides a professional service should consider taking out PI insurance. No matter how careful you are mistakes can happen during work. If you fall victim to any mistake, there is a possibility that this could cause a significant financial loss.

When does cover start?

Hiscox can provide cover that starts immediately after purchase on a specific date.

Why do I need annual cover if I have a short-term contract?

It is recommended that you take out PI insurance even if your contract only lasts for a short period of time. Even if your insurance only ran for the duration of your contract, if a claim was made against you any time after, you would not be covered.

How long does it take to arrange cover?

You can get a tailored quote online or over the phone and cover can begin immediately. Policy documentation will be emailed to you for reference.

How can I pay for insurance?

You can pay for your policy annually or by interest-free monthly Direct Debit instalments.

Does insurance cover work I have done in the past?

Hiscox can provide retrospective cover, covering you for similar work you have undertaken in the past. If you would like to take out professional indemnity insurance, we can cover the work you have done in the past as well as all work moving forward.

Retroactive Dates

The term ‘retroactive date’ may sound like another piece of insurance industry jargon, but understanding the importance of the term when it comes to your professional indemnity insurance could mean the difference between a claim being paid or rejected.

Professional indemnity insurance should be in place from the first day you begin trading if it is a protection that your business needs. Many business owners, however, may have been unaware that they needed professional indemnity cover or perhaps thought that because they only had a few small clients in the beginning that there was little likelihood of being sued.

Why a ‘retroactive date’ is important when buying professional indemnity insurance

It’s important to note that every business that provides advice as part of its service needs to consider professional indemnity cover in case anything goes wrong and a client decides to take legal action. As your business grows or if your circumstances change and you find yourself taking on larger corporate clients, some clients will insist that you have professional indemnity cover.

How to make sure you’re covered

When buying professional indemnity cover, you will be asked what date you want the policy to run from. If you’re replacing a previous policy, make sure you tell them what date the original policy started from. This effectively becomes your ‘retroactive date’ and ensures that any work you’ve done back to that date will be covered.

When you may not be covered by professional indemnity cover

Let’s say, for example, that you take out professional indemnity to begin at the start of a new contract with a large corporate client. A few months later you receive a threat from an earlier client to sue you as they have problems with the work you did for them. That’s no problem, as your professional indemnity insurance will cover you, right? Unfortunately, no; in this case, as the policy you bought started at the beginning of your new contract, you aren’t covered for any work carried out before the inception date of the policy.

Applying a retroactive date to professional indemnity insurance

If you have never had professional indemnity insurance, you can discuss with your insurer the possibility of applying a retroactive date to when you first started trading. They will need to be comfortable that you’re not expecting a claim imminently from your past work and there is no ulterior motive behind the request. An extra amount will probably be charged with your premium but it provides peace of mind.

If you don’t know how far back your professional indemnity policy covers you for – what the retroactive date is – check with your insurer who will be able to let you know. Understanding the importance of a retroactive date is one piece of insurance jargon that shouldn’t be ignored.

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