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Buy Contractor Insurance

Buy contractor insurance or 1099 contractor insurance if you’re an independent contractor. You might be wondering what type of coverage you need to buy. Do you need small business insurance, or are the rules and liabilities different, insuring yourself as a contractor?

In this guide to contractor insurance, we explain everything you need to know, and we answer some of the most frequently asked questions about contractor coverage.


Quick References

  • Who needs to buy contractor insurance?
  • In Conclusion
  • Other Insurance Types


Who needs to buy contractor insurance?

There are many types of contractors; both the work they do and sectors they belong to reach far and wide. Because there is no single 1099 contractor’s insurance policy, most types of coverage can be tailored to meet the individual needs and risks that you may face in your line of work. To buy contractor insurance or 1099 contractor insurance call AmeriAgency at 888-851-5572.

Regardless of whether you work from home as a digital marketing consultant, or you’re a plumbing or construction worker, you will have certain liabilities that you will need to protect yourself from. Although in years gone by, a contractor would have been defined as a trades person, times have changed, and there are contractors in almost every sector.

What type of insurance do contractors need to buy?

The coverage you need will depend on the work you do, and the specific risks you are exposed to. Buying the right type of contractor insurance can protect you from accidents, third-party property damage, and legal action. If you don’t buy the right type of coverage for your work as a contractor, then you be left exposed to significant financial risk. Here is a general overview of the different types of contractor insurance. To buy contractor insurance or 1099 contractor insurance call AmeriAgency at 888-851-5572.

#1 E&O Insurance for Contractors

If you provide consultation or advisory services as part of your business, such as an accountant, business consultant, financial planner, architect, or interior designer. Any such type of provision can bring exposure to liabilities. Should any of your clients suffer a loss following your recommendations, they may file a lawsuit. Errors and Omissions coverage is there to protect you against any such occurrence.

#2 Product and Liquor Liability Insurance for Contractors

If you are a contractor that sells alcoholic beverages and food at functions or from a truck, then you will need to make sure you have the right coverage in place to protect you. If a patron is over served alcohol, and they injure themselves, another person or property, then you could be liable for the costs.

#3 Commercial Auto Insurance for Contractors

If you use your personal vehicle for work-related reasons, you might not be fully covered by a general auto insurance policy. Aside from this, you might not have the right level of coverage to adequately protect your equipment.

Commercial auto insurance can enable you to cover the costs of any lawsuits, medical bills, property damage, and other expenses that may arise from an accident. It can also pay for any vehicle damage that is caused by vandalism, weather, or vehicle theft as well.

A contractor’s commercial insurance or 1099 contractor insurance policy can be customized to fit your unique needs.

Do contractors need to buy commercial auto insurance?

If you drive a company-owned vehicle, then it will need to be covered by a commercial auto insurance policy. It is also usually required if you transport any tools or equipment, or if you operate a construction or contracting vehicle of any type. Seguros Para Contratistas

If in doubt, always check this with a local commercial insurance agent first. Each state will usually have their own regulations that set out how much insurance coverage you will need to buy; at a minimum, you need to make sure your insurance meets these requirements.

Can I use my personal vehicle for work-related reasons as a contractor?

A business auto insurance policy will usually only cover those vehicles that are owned by the company. However, as a contractor, you might choose to use your own vehicle or even a rented vehicle for work-related reasons. However, most personal auto insurance policies will not cover business use. Hired and non-owned auto insurance will give you the right type of coverage if you want to use your own vehicle for work. To buy contractor insurance 1099 contractor insurance call AmeriAgency at 888-851-5572. Seguros Para Contratistas

#4 Medical and Disability Coverage

As an independent contractor, you won’t typically belong to any type of group medical coverage plan. As such, you are exposed to a loss in income should you become unwell, injured, or disabled. Buying medical and disability coverage can alleviate some of that risk and give you peace of mind.

#5 Equipment Breakdown Coverage

If you’re the type of contractor who depends on essential tools and equipment to do your work, then this is another key consideration. When trying to decide whether this is needed, consider these essential questions.

  • Can you perform all of your duties without your equipment?
  • If something was to breakdown, would you be able to serve all your customer’s needs?
  • How much would it cost if any particular piece of equipment was out of action for up to 3 months?
  • Will your customers wait for your equipment to be fixed or replaced, or could they go elsewhere?

These are tough questions to ask, but hopefully, the answers will help you to decide whether the cost of buying this insurance is worth the investment. In most cases, the answer is a resounding yes.

If you would like to find out more about the different types of equipment that can be covered, you can speak with a local commercial insurance agent. They can give you a cost for this insurance, along with helping you choose the most suitable levels based on your individual business needs. Seguros Para Contratistas

#6 General Liability Coverage

This is one of the most essential types of coverage you can buy for your work as a contractor. A general liability policy can protect you from any third-party claims for property damage, personal injury, advertising injury, and more. Here’s a breakdown of the coverage you get from a contractor’s general liability policy.

  • Property Damage – This element of a general liability policy will offer coverage in the event that either you or one of your workers damages property that belongs to a third party.
  • Bodily Injury – This provides coverage if either you or somebody who works for you cause an injury or even death to a third party while they carry out their work-related duties. It can pay for medical care and legal expenses in the event you have to deal with a lawsuit.
  • Advertising Personal Injury – This provides coverage in the event you allegedly cause damage to another entity’s reputation or cause them to suffer a financial loss as a result of libel, false advertising, or slander.
  • Completed Operations / Product – This element of general liability coverage gives you protection in the event a project that you finished develops an issue or causes damage. This can be extended to cover the products you make, sell, or distribute as well.

Are a crew’s workplace injuries covered by general liability coverage?

No. A general liability policy will only offer coverage for third-party injuries. If you want to protect members of your crew against accidents, then a worker’s compensation policy is ideally suited for this.

**Please note**

Not all general liability policies are created equal, and the specific levels of coverage and inclusions may vary slightly from provider to the next. As such, it’s important to speak with a local contractor insurance specialist who will be able to advise you on the best type of coverage for the specific type of work you do and the individual risks your business exposes you to. To buy contractor insurance or 1099 contractor insurance call AmeriAgency at 888-851-5572. Seguros Para Contratistas

#7 Contractor Bonds

Although it might not technically be a type of insurance policy, a surety bond is something you might come across when dealing with contract work. It acts as a guarantee that you will complete the project in line with your contractual obligations. The reason we have included this in this post, is that an insurance company will typically issue the bonds to contractors, and it’s also another example of something a local commercial insurance agent can help you with.

The issuer of the bonds will assure your client of reimbursement should you not deliver on your project. It will then be down to you as the contractor to repay the insurer. Generally speaking, a surety bond can cost anything between 1-15% of the total bond amount. Seguros Para Contratistas

Surety bonds are used frequently for contractor work, and your local insurance agent will be able to help you get more relevant information. There are four different types of surety bonds that are used with contractors.

  • Big bonds

This type of surety bond is designed to stop a contractor from submitting unrealistic bids for their work. They offer a guarantee of compensation to the owner of the project in the event you fail to honor your original bid proposal.

  • Contractor License Bond

This type of license bond will be required by law at either a city, state, or county level. These are essential if you need to get licensed, and if you try and work without one, you could risk facing huge fines.

  • Performance Bonds

This type of surety bond forms a type of guarantee that a project will be completed on time, as per the original contract. If a project fails to meet any pre-determined quality standards, or it takes too long, the owner of the project can claim against this performance bond.

  • Payment Bonds

This bond will act as a guarantee that you will pay your suppliers and subcontractors. A client might request that you buy a payment bond because having these bonds can protect their interests, as they will not need to cover these costs should the contractor fail to pay. If you are bidding on a contract that exceeds a value of $100,000, then federal law will require you to have payment bonds in place before any contract award can take place. Seguros Para Contratistas.

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