New study finds many firms operating without insurance

New study finds many firms operating without insurance

A new study by insurance group AXA has found that, while self-employment continues to boom, many businesses are taking unnecessary risks by operating with the right insurance policies.

The study revealed that, while tradesmen were the most likely to be fully covered, the vast numbers of professionals turning to freelancing in their droves were not getting the correct insurance to cover any mistakes in their work.

If you operate a contractor business or operate as a freelance professional, it’s wise to look at your insurance coverage to protect yourself against claims. A good professional indemnity insurance policy will ensure your business is covered if there are any claims made against you.

The study found that 83 per cent of tradesmen has public liability insurance to cover themselves against claims for accidental injuries and property damage. However, only 35 per cent of self-employed professional workers had the correct professional indemnity insurance.

In another worrying statistic, one in 10 professionals had no knowledge of professional indemnity insurance, while a further 12 per cent thought it would cover them against accident and injury claims.

Darrell Sansom, managing director at AXA, said: “Accidents and injuries are well understood by businesses.

“It’s easy to imagine how someone would react if a hammer fell on their foot, and you’d expect a claim to follow.

“Mistakes in professional work are less tangible: like missing a nought off a price in an advert or deleting client tax records by mistake. Accidents like these can be just as damaging to your business though if a client decides to sue for professional negligence.

“We’d advise companies that if customers rely on their advice, it’s likely they need professional indemnity cover. Do your research first though — your professional body, financial adviser and insurer can all confirm whether you need it or not.”