Independent contractor liability insurance is a type of general liability policy for people who work as independent contractors, gig workers, wood workers, painters, plumbers, and other professions. Although there are many types of contractors and self-employed individuals, contractor liability typically is the umbrella term that the insurance they require falls under.
General liability insurance, which covers claims for unintentional injury and third-party property damage, is a type of insurance for small enterprises. Additionally, it covers costs related to commercial injury, copyright breaches, and reputational loss. Depending on the additional riders a business opts for at the time of purchase, the policy may cover more or less than these basic items.
Are all independent contractors required to have liability insurance policies?
Although some jurisdictions require it, not all independent contractors, although typically not those engaged in certain industries like construction, need general liability insurance. Additionally, some of your clients might require contractor insurance in California before working with you.
Even if your jurisdiction or customer doesn’t require insurance coverage, getting coverage is a good idea. Without it, you would be liable for covering the costs of unintentional injury claims, property damage claims, and other claims (such slander and libel).
Which categories of independent contractors need business liability coverage?
The following types of independent contractors may find liability-only insurance useful:
- Woodworkers, electricians
- Individual photographers, writers, and editors, as well as graphic artists
- Home and carpet cleaners
- Independent business consultants independent building contractors
- Independent stylists and salon personnel
- Independent marketing consultants
- Independent public relations consultants
- Plumbers, painters, tradesmen in similar fields
Contractors who are self-employed should have construction industry framed insurance.
General liability insurance (https://www.tdi.texas.gov/pubs/pc/pcgenliab.html) is required by the majority of independent contractors in the construction industry. Without it, they won’t be able to get jobs in the construction industry. Many clients seek general liability insurance from building companies before agreeing to conduct business.
Also, your state could need it. State authorities may occasionally mandate independent building contractors to have general liability insurance.
Individual construction employees are a perfect fit for business liability coverage since they visit job sites and interact with clients directly. You want your company’s interests to be safeguarded under particular conditions.
What Is Covered by Independent Contractor Insurance?
Usually, this insurance coverage includes:
- Damage to people’s bodies and property caused by your small business.
- Reputational harm caused by slander or libel.
- Damage to advertising, including infringement of copyright.
What Excludes Independent Contractor General Liability Coverage?
This type of insurance does not cover all aspects of running a business. Typically, there isn’t coverage for any of these items under a general liability policy:
- Company vehicles
- A lack of professionalism
- Damage to equipment and property
- Theft of equipment and property
- Sickness and injury among employees
Independent contractors may buy extra types of insurance cover to deal with such issues.
How Much Does Independent Contractor Liability Insurance Cost?
Insurance coverage generally costs around $42 per month, according to Insureon. It may prove to be well worth the cost if you are sued for anything, such as inadvertent harm to another person or bad publicity.
According to The Hartford, the median cost of a slip-and-fall event is $20,000, but the average lawsuit is $100,000. The cost of a minimal insurance policy for independent contractors varies based on a variety of factors, such as:
- The risk to the business
- Insurance coverage amount
- Highest deductibles allowed
- Where is your business situated?
- How long has your company been around?
What is a general liability insurance certificate?
Once you are protected, you can request a certificate of insurance from your insurance company. This official document for an insurance policy contains a list of all the covered categories and policy exclusions. It should be provided to you by your insurer at no additional cost.
An insurance endorsement includes:
- Name of the insurance company and your policy number
- Beginning of the policy
- Boundaries of coverage
A general insurance policy for liability certificate could be requested by your customer if liability or significant losses are concerns for a work. As soon as you have the insurance certificate, you may provide it to your client and set to work.
Alternative to General Liability Insurance
As an alternative to acquiring general liability insurance, a client may identify you as an “additional insured” on their own firm liability policy. An additional insured is somebody covered by an insurance policy in addition to the principal policyholder. If you are additional insured, you will be covered by the client’s insurance for the duration of the project.
A customer may want to cover several independent contractors in a general liability insurance, notwithstanding the cost. It costs the client less for the independent contractor to get their own general liability insurance.
Having your own company’s liability insurance coverage allows you to take work from a variety of clients as an independent contractor.