Contractor insurance for your company

Contractor Insurance is a cover that provides a limited company contractor with protection against different liabilities in the course of the contracting business. In the absence of an Insurance policy the limited company contractor is on a fast lane to pitfalls. Possibilities of claims are a complex and multifaceted problem that requires maximum attention and consideration. It is a misconception to create an escape route to conceal contractor’s mistakes and liabilities. The best solution is to comply.

Adherence to the Rule of Law

As a Limited Company Contractor it is an essential requirement to comply with the rule of law. It is required by the law that before the formation of a Limited Company, the directors must agree and complete the necessary documents namely:-

Memorandum of Association is a document which contains names of directors, number of shares, signature sample and number of Directors.

Articles of Association is a document which entails the governing factors of the Limited Company Contractor which may include who runs the company, how will employment of staff be carried out and will it be on contract or permanent basis, who will be the Company’s Secretary, How will salaries be paid and why and how will profits be shared amongst the Directors.

Application form is a document which is completed by and in the presence of all Directors, outlining the details of the Limited Company Contractor. This includes address of the Company, telephone numbers, name of the premise or building and location of the Company.

All the documents must be signed by all the partners.

Many companies prefer contracting with Limited Company Contractor with Contractor Insurance because they are assured of professionalism of the Company. This would help in the marketing strategies of the company and increase profit. Note that once the company gets an insurance cover against liability caution must still be a priority and negligence in the contracting activities should be minimal. Most insurance covers will not cover intentional mistakes. Workers are an essential asset in a company and Contractor Insurance should cover all the workers in the company. This cover should include accident cover and medical cover. This will motivate the workers.

Limited Company Contractor enjoys many advantages. The financial liability of the company Directors is limited which means that in case of bankruptcy or loss, the personal finances of the Directors can not be interfered with. It is very simple and easy to run, with a clear road map as stipulated in the Articles of Association and Memorandum of Association. In the case of any disagreements or confusions the documents will always pave the way forward. In the event of closure of the Limited Company Contractor, as outlined in the documents it will be easy and free of disagreements.

In conclusion be careful who the partners or Directors of the Company are, weighing different factors like, trust, efficiency, effectiveness, and qualifications among others. Partners or Directors should be people of good standing and stability. Cases of mistrust will eventually weigh down the Company.

Raj Shastri is the author of this article on Contractor Insurance. Find more information on Limited Company Contractor here.