There are many perils to being an energy sector contractor, particularly if you’re typically based offshore. Working in such an overarching sector may see your working conditions change dramatically from client to client – meaning that your insurance needs change too.
Many of the risks that come as part of an energy sector job often aren’t covered by mainstream insurance policies – so how can you make sure you’re fully covered?
Professional indemnity for energy sector contractors
Contractor professional indemnity insurance will cover the cost of legal fees where it is alleged that a client has suffered a financial loss as a result of a contractor's error, omission or negligence. It also extends to provide further cover for compensation or damages payable to rectify those errors. Put simply, this insurance is an energy sector contractor’s safety net.
Contracting in the energy sector, particularly off-shore, is a high-risk occupation, with ever-increasing possibilities for professional error – whether it’s interpreting data wrong or miscalculating measurements, an error could have disastrous consequences. Invariably, mistakes will be made, and disputes will arise. Contractors should, therefore, understand the risks they face, how their business may be affected, and insure accordingly.
Public liability for energy sector contractors
Public liability (PL) insurance covers the cost of a claim made by someone who has suffered injury or property damage as a result of work you’ve done. This can be made by a client or a member of the public. It covers the ‘physical’ damage caused by a mistake.
While there’re obvious risks for offshore energy sector contractors working manually with heavy machinery, office-based energy sector contractors can also fall foul of a claim. For example, you could be hotdesking in a client’s office and someone trips over your laptop bag, causing them to break their arm and their own laptop in the fall. Should they file a claim against you, it could bankrupt a small limited company or sole trader without PL insurance.
Employers liability for energy sector contractors
Employers liability (PL) insurance provides protection against compensation claims made by employees, resulting from illness or injury sustained during their employment.
The Employers Liability (Compulsory Insurance) Act 1969 makes employers liability insurance a legal requirement for any company that has employees - contractors in any industry are no exception to this requirement. Failure to ensure adequate cover could mean prosecution and lead to heavy fines.
However, not every business will need employers liability insurance. If you are the sole employee in your limited company and hold 50% or more of the shares, then your business may be exempt. Many contractors will fall into this category, but it’s important to remember that the requirement changes the moment someone else is employed by your company, even where this person is your spouse or a family member.
Directors and officers insurance for energy sector contractors
Directors’ and officers’ liability insurance, or management liability insurance, is insurance cover that offers financial protection to those who are the director, partner or officer of a company. It is designed to cover the cost of claims for compensation made against the insured individual.
Being a director, partner or officer of a limited company that operates within the energy sector brings with it certain responsibilities – to employees, members of the public, investors and regulators. It also exposes the individuals holding the positions of director, partner or officer to personal liability for the actions or omissions they make in the performance of their duties. This means that they can personally be the subject of claims which could lead to the payment of fines, compensation or imprisonment.
What can Larsen Howie offer energy sector contractors?
We’ve just launched brand new insurance that provides energy sector contractors comprehensive cover under one easy to manage policy. Larsen Howie’s Energy Sector Combined insurance includes cover at varying levels for public liability, employers liability, professional indemnity, and directors and officers liability. UK registered companies working under a UK contract can take out the policy for cover in the UK, Europe, and the rest of the world (excluding America, Canada and Mexico).
Pete Willcocks, Managing Director at Larsen Howie, said: “We’re very excited to be launching this product. It’s such a bespoke cover that it’s taken a couple of years to bring to the market exactly as we wanted it, and - more importantly - how contractors told us they needed it. With our policy, energy sector contractors are covered for a spectrum of scenarios under one insurance, the aim being to minimise having to search for a new policy with every new engagement.”
“We were also very focussed on getting the public liability aspect of the combination insurance right, as that tends to be the biggest risk factor for many energy sector workers across the board,” Willcocks continues. “The energy sector is complex, and the insurance required to satisfy contracts can be onerous. UK contractors can be assured that wherever they get an engagement, be it onshore or offshore, our policy will protect them.”
This cover is available to buy online through the Larsen Howie quote builder or over the phone with an expert advisor. An online chat is also available, and contact is welcome through all Larsen Howie social media platforms.