Contractor Insurance UK | Compare PI, Public Liability & IR35 Cover

Contractor Insurance UK

Compare Professional Indemnity, Public Liability, IR35 & more from trusted providers

Last updated: November 2025

As a contractor, it's crucial to safeguard your business and personal assets from potential risks. The right insurance policies can:

  • Protect your business and reputation in case of claims.
  • Provide financial security for you and your family in the event of illness, injury, or death.
  • Help maintain your client relationships by demonstrating professionalism and risk management.

Our Insurance Partner Markel have a client base of over 200,000 and understand the unique challenges faced by contractors and small business owners.

Markel Direct Insurance

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Types of Insurance Contractors May Need

There are various types of insurance that contractors often consider to ensure they are fully protected. These include:
Professional Indemnity Insurance
Protects you from claims made against you for negligence or mistakes in your professional services, including defence costs and damages.
Employers Liability Insurance
Covers you if an employee becomes ill or is injured because of the work they do for you.
Public Liability Insurance
Covers you for accidental injury or property damage caused to clients, the public, or their property during the course of your work.
Office Insurance
Protects your business equipment from damage, loss, or theft, whether you're working from home or in an office setting. You can also add coverage for portable equipment and business interruption.
Cyber and Data Risk Insurance
Helps protect your business from cyber threats such as data breaches or malicious attacks that could disrupt your operations.
Personal Accident Insurance
Provides financial support if you or a key employee are unable to work due to an accident, covering lost income or medical expenses.

Additional Insurance Coverage Options

Many contractors also consider additional types of insurance to further safeguard their businesses

Contractor IR35 Insurance

Protects you from tax liabilities related to the IR35 legislation, helping ensure compliance.

Income Protection Insurance

Covers your income in case you're unable to work due to illness or injury, ensuring financial security during challenging times.

Relevant Life Insurance

A tax-efficient life insurance option for limited company contractors, offering 'death-in-service' benefits.

Life Insurance

Provides peace of mind and financial security for your family and dependents in the event of your death.

Critical Illness Insurance

Helps protect your financial well-being if you're diagnosed with a serious illness, allowing you to focus on recovery.

Jury Service Insurance

Offers protection against lost income if you're called for jury service, with coverage for up to £500 per day.

Frequently Asked Questions

Most UK contractors need Professional Indemnity (PI) insurance as a minimum - this is often contractually required by clients before you can start work. Public Liability insurance is also commonly required if you visit client premises. Other policies to consider include: Legal Expenses insurance (covers contract disputes and IR35 tax enquiries), Cyber insurance, Portable Equipment insurance, and Employers Liability (legally required if you have employees). The exact requirements depend on your contract terms and industry sector.
Professional Indemnity insurance protects you from claims of mistakes in your professional services, advice or designs. It covers legal defence costs and compensation if a client claims your work caused them financial loss. This includes: professional negligence, unintentional breach of confidentiality, unintentional breach of copyright, defamation and libel, loss of documents or data, and loss of money or goods for which you are responsible. Markel Direct provides PI cover from £50,000 to £5 million.
Public Liability insurance covers you against claims of injury to someone (including clients, visitors or suppliers) or accidental damage to third-party property as a result of your business activities. For example, if a fellow contractor trips over your laptop cable and breaks their wrist, or you accidentally spill coffee on a client's expensive laptop. Public Liability insurance from Markel Direct also includes Product Liability insurance with cover limits from £1 million to £5 million.
Employers Liability insurance protects you against claims of injury or illness suffered by employees due to their employment with you. Legally, every business with employees must hold a minimum of £5 million in coverage. For example, if an employee slips on a wet floor at your office and injures themselves, or trips over a cable and is unable to work due to the injury. Employers Liability insurance from Markel Direct provides £10 million of cover as standard.
Legal Expenses insurance offers comprehensive protection against various legal costs including: contract disputes (such as recovering debts owed by clients), tax enquiries including IR35 investigations by HMRC, and employment disputes with former employees. The likelihood of having a dispute with a client, supplier, or employee is considerable, making this cover highly beneficial for contractors.
Cyber insurance is increasingly important as attacks become more sophisticated. It covers expenses related to managing and recovering from cyber-attacks or hacking threats. If you're the victim of a cyber-attack that compromises your computer systems and client data, the impact could be devastating. Cyber insurance can help meet ransom demands, cover breach notification costs, and pay for restoring damaged systems. Markel Direct provides cyber insurance with limits from £50,000 to £250,000.
Office insurance (Buildings and Contents insurance) protects your premises against accidental damage, including theft and damage caused by disasters such as fire, flood, explosion or storm. It covers office buildings, office contents and computer equipment. Business Interruption insurance can also cover loss of income if you're unable to work from your primary business premises. Markel Direct provides up to £100,000 of Business Interruption cover.
Many clients will require you to have Professional Indemnity insurance before you can start working for them. If a claim is made against you, PI insurance could pay your legal defence costs and expenses, plus any compensation you may be responsible for paying. Check your contract for required cover levels, or ask your agency/client. Markel Direct provides PI insurance with limits ranging from £50,000 to £5 million.

Want to learn more?

Our comprehensive guide explains each type of contractor insurance in detail, with real claim examples and coverage information.

Read the Full Guide →
*If you're unsure which insurance policies are best for your needs, it's always worth consulting with a trusted provider who can offer tailored advice and coverage for contractors.
Contractor IR35 Insurance

With the current uncertainty surrounding the IR35 legislation, one way you can protect yourself is by taking out IR35 insurance (also known as tax liability cover).