Umbrella Employment Guide – Insurance Explained

05 October 2023

One of the benefits of contracting via an Umbrella company is freedom from admin, and that includes arranging insurance coverage. When you work as an employee (as it is in the case of an umbrella company), why should you have to sort out your own insurance? This is where included insurance comes in to make life simpler.

So what insurances are being typically offered?

Employer’s Liability insurance

Since the Employer’s Liability Act was introduced in 1969, every employer must hold a £5 million policy cover minimum. Umbrellas are no different, and as an employee of the one, you’ll be covered as well; at SmartWork, we have a £10m cover.

Companies that don’t have a policy can face fines up to £2,500 per day.

This insurance covers both parties for claims in case of illness or injury. Should the court order a payout to the employee, the employer’s liability insurance will cover the amount.

Public Liability insurance

This insurance is not required by law, but if the employee of an umbrella company is in contact with the members of the public or works at the property of the client’s site, it is worthwhile having.

The policy will cover any damage or injury claims arising from any accidents caused by the umbrella employee.

Most of the time, public liability insurance is a contractual requirement to protect the client since the umbrella worker is not covered by the client’s existing policy that is in place for their permanent employees.

Professional Indemnity insurance

Professional Indemnity insurance can cover a wide range of risks. Typically, claims arise from professional incompetence, negligence or unintentional breaches of confidentiality. Claims are usually tied to the financial loss suffered as a result of the mistake.

Having Professional Indemnity insurance will almost certainly be a contractual requirement to give the client protection of being able to claim against the insurance.

Medical Malpractice Insurance

Umbrella companies work with a lot of healthcare professionals, so it just made sense that we have a policy in place that covers claims made for malpractice, negligence or breach of a duty of care.

You would be, quite rightfully, asking what the difference between medical malpractice and public liability insurance is. While public liability insurance covers claims made for trips and falls, malpractice insures against bodily or mental harm caused in the course of the professional doing his or her job.

So, what insurance does SmartWork provide for its contractors?

We meet and exceed industry accreditation standards and offer £10 million cover for Employers’ Liability and tailored coverage for healthcare professionals with a specialized Medical Malpractice policy. Our contractor employees enjoy a comprehensive cover included with our umbrella services:

£10 million Public Liability
£10 million Product Liability
£10 million Employers Liability
£5 million Professional Indemnity
£2 million Medical Malpractice

We hope that this article has helped answer some of your questions. If you’d like to see what SmartWork can offer, please do not hesitate to contact us at 0800 434 6446 or e-mail

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