How can you find out whether a business has insurance?

The simple answer is that, beyond asking at the point of contact, there is no definitive way to know whether a business holds insurance until you raise a claim against them. But the importance of their cover to you as a contractor cannot be underestimated. As such, it is advisable to contractually stipulate that a supplier holds the business insurance you feel to be in your best interest.

This depends on the nature of the work you are contracting. If you hire a builder, it would be prudent to request that they hold Tradesman's Liability Insurance. This covers their legal costs for injury to the public or damage to property, and pays compensation if they are found to have been at fault.

If you are paying someone for their know-how, Professional Indemnity Insurance like the kind offered by the RAC is highly advisable. Should their advice lead to loss of earnings or damage to your company’s reputation, this will ensure they are able to pay adequately for your shortfall. It can also cover the loss or theft of documents and data, a particularly important consideration with the increasing trust placed in IT suppliers.

Should you make use of a freelancer who works from home it is advisable to inform them that their standard Household policy does not cover work-related visitors. With the RAC’s Working from Home Insurance package they can extend their Occupiers' and Personal Liability Insurance to cover just such a situation. If an accident occurs on their premises they will be covered - and you will be protected.

Business insurance policies to fit these and many other requirements are available from the RAC. Our policies provide cover for a range of enterprises, and are tailored to help everyone from sole traders to larger enterprises. If a supplier is unsure of their insurance options, a conversation with a specialist RAC advisor could help them find a package that puts everyone’s mind at rest.

Insurance is not simply about protecting the policyholder. As a contractor, it is vital to know that your supplier holds the correct form of business insurance, so if the unexpected does occur your interests will be safeguarded.