Global Courant
It’s all well and good for someone to tell you how valuable or beneficial something is, but without really knowing what something does in practice, these words often fall on deaf ears. When I look at insurance, and in our case PI insurance for contractors, the best way I can describe why having the policy is so valuable is by giving you examples of it in action with real life situations. (Hypothetical of course)
Before I start I will give you a brief summary of contractors and of course PI insurance as a policy. Contractors require PI insurance to obtain professional indemnity insurance, where the policy provides protection against claims for negligence arising from professional misconduct or misconduct resulting in financial loss to the end customer. Claims against contractors do happen, and when they do they can sometimes amount to millions of pounds in damages, which is a huge amount to be held liable for (even if you’re Simon Cowell). Professional negligence can happen at any time in the workplace, and for contractors who are 100 percent liable for their limited liability companies; millions of pounds in damage would be financially devastating.
Let’s look at a hypothetical example, take Simon, an IT contractor. (This isn’t meant to be Simon Cowell in any way, shape, or form, though they share similar tastes in black t-shirts and belts worn around the midriff.) Simon is an IT contractor who works for a bank on a six-month contract. His duties include coordinating and collecting customer data provided to him through masses of spreadsheets and files so that the bank he works for has a simpler format of customer statistics. Simon is nearing the end of his contract and has almost finished collecting and archiving a database of about a thousand customers. Unfortunately, Simon has been staying up late lately and getting tired. Thinking he has backed up this huge amount of data, Simon decides to reboot the current system he is working on and then reprogram the existing customer data to make his end task easier. By doing so, Simon unknowingly deletes all the information he has collected and also any existing information that has taken the bank years to collect. As a result of Simon’s professional negligence here, the bank then files a liability claim against him, claiming £2 million as a result of his actions.
This is where PI insurance would come in handy, as a financial safety net protecting Simon’s assets and costs throughout this process. Thanks to the insurance that Simon has taken out, the PI cover has taken care of all the costs and time that he would otherwise be liable for. As you can see from this fictional example, PI insurance is a very effective insurance policy that can cover a contractor up to millions of pounds. This peace of mind is essential for any contractor working in IT, as it is for other typically more risky professions.
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