There are several types of insurance that a contractor may benefit from. These policies are known as:
Professional Indemnity Insurance - in case a client sues for making a costly mistake whilst undertaking contractual duties such as the loss of data or unintentional breach of copyright.
Public Liability Insurance - in case a member of the public is injured, or property is damaged as a result of the actions of the company (or its employees).
Employers Liability Insurance - in case an employee is injured (or worse) whilst working for the company. Often mandatory for any company's that has more than one working employee.