On this page:
Why do Contractors need insurance?
As a contractor, you enjoy a lot of freedom. You get to choose the clients you work with, the hours you work, and how much you’ll get paid. Being a contractor can be an exciting way to build a career while working with many different clients instead of just a few!
But with self-employment freedom comes a lot of responsibility. When something goes wrong, the responsibility for fixing it falls on your shoulders. That could mean hefty repair bills, replacing broken equipment, or even expensive lawsuits.
That’s where insurance for contractors could help protect you and your business against common risks that contractors face. These policies help provide important peace of mind, so you can focus on your clients.
Who Needs Contractor Insurance?
Contactors and subcontractors work with many different clients. But while you are doing work for them, you’re not considered an employee. This means that you may not be fully covered by your client’s insurance policies while you’re on the job.
This is why many clients require the contractors and subcontractors they hire to have their own insurance policies, particularly Professional Indemnity and Public Liability. Before you start a project, you may want to check the contract to see if there’s an insurance obligation that you must meet.
Professional Indemnity insurance*
Professional Indemnity (PI) insurance is an important form of protection for contractors that provide specialist services or professional advice. It is designed to respond to claims against your business for losses as a result of actual or alleged negligent acts or omissions in the provision of your professional service or advice.
PI Insurance will also assist with the legal costs associated with responding to or managing claims which are covered by the policy.
What is covered?
Professional Indemnity insurance covers acts of professional wrongdoing, such as:
- Damages and claimant costs awarded against you
- Civil liabilities which may arise from but are not limited to:
- Providing misleading or negligent advice
- Breach of duty (confidentiality and other privacy issues)
- Defamation, libel or slander
- The loss or damage to documents
- Infringement to intellectual property (including copyright infringement)
- Related defence and legal costs of a claim
- The costs involved with investigating a claim including those by a professional body
- The cost of responding to a disciplinary inquiry
- Court attendance costs
- Public relations costs
- Bodily injury or illness caused from the professional services covered under the policy
What is typically NOT covered?
A Professional Indemnity policy typically does not cover the following:
- Intentional damage
- Any claims or circumstances that are known prior to the period of insurance
- Acts of fraud and dishonesty
- Accidental injury and property damage
Public Liability Insurance*
Public Liability insurance is designed to provide protection for you and your business in the event a customer, supplier or a member of the public is injured (and not covered by the Accident Compensation Commission (ACC)) or sustains property damage as a result of your negligent business activities.
As a contractor, you may meet or work with clients in a variety of places—your office, their business premises, worksites, or other third-party locations. Public Liability insurance covers you for injury and property damage claims that happen wherever you are working.
What is covered?
Professional Indemnity insurance covers acts of professional wrongdoing, such as:
- Personal injury suffered by a third party (e.g., a client, customer, supplier, or member of the public)
- Damage to third-party property caused by your negligent business activities
- Legal and defence costs resulting from a covered claim
What is typically NOT covered?
- Personal injuries to you or your employees
- Damage to your own property
- Advertising Injury
- Costs of fixing faulty workmanship
- Professional negligence or illegal activity
- Reckless or wilful failure to take care
- Contractual liability
- Asbestos
- Pollution
- Events occurring before or after the policy period
Business Insurance*
Business Insurance is an insurance package designed to provide cover for your business contents, stock, tools and commercial premises when an insured event occurs (such as fire, storm, theft or even accidental damage). A Business Insurance policy can also cover your portable equipment and loss of revenue due to business interruption in specified circumstances.
A Business Insurance package can be tailored to protect you from multiple risks. It can include coverage for the risks that apply to your contracting or subcontracting business in one convenient policy.
15000+ NZ
small business covered
Real-life customer reviews verified by Feefo