As a contractor, it’s important to have the right insurance coverage to protect yourself and your business. From liability insurance to workers’ compensation, this guide will help you understand the different types of insurance you may need and how to choose the right policies for your specific needs.
General Liability Insurance.
General liability insurance is a must-have for contractors. This type of insurance protects you from claims of bodily injury or property damage that may occur during the course of your work. For example, if you accidentally damage a client’s property while working on a project, your general liability insurance would cover the cost of repairs or replacement. It can also cover legal fees if you are sued for damages. Make sure to select a policy with adequate coverage limits to protect your business. Click here for a general liability quote.
What insurance do I need as a contractor? Professional Liability Insurance.
In addition to general liability insurance, professional liability insurance is also important for contractors. This type of insurance, also known as errors and omissions insurance, protects you from claims of negligence or mistakes in your work. For example, if a client claims that your work was not up to industry standards and caused them financial harm, your professional liability insurance would cover the cost of legal fees and any damages awarded. This type of insurance is particularly critical for contractors who provide design or consulting services.
Workers’ Compensation Insurance.
As a contractor, it’s essential to have workers’ compensation insurance to protect your employees in case of injury or illness on the job. This type of insurance covers medical expenses, lost wages, and other related costs. In some states, it may be required by law to have workers’ compensation insurance, so be sure to check your local regulations. Even if it’s not required, it’s still a good idea to have this coverage to protect your business and employees.
Commercial Auto Insurance.
If you use a vehicle for business purposes, such as transporting equipment or traveling to job sites, you may need commercial auto insurance. This type of insurance provides coverage for accidents, theft, and damage to your vehicle while it’s being used for business purposes. It’s important to note that personal auto insurance typically does not cover accidents that occur while using your vehicle for business purposes, so it’s important to have the right coverage in place.
What insurance do I need as a contractor? Umbrella Insurance.
Umbrella insurance is an additional type of liability insurance that provides extra coverage beyond the limits of your other insurance policies. It’s designed to protect you from major claims and lawsuits that could potentially bankrupt your business. For example, if a customer is injured on your job site and sues you for damages that exceed the limits of your general liability insurance, umbrella insurance can provide additional coverage to help cover the costs. It’s essential to consider umbrella insurance if you want to protect your business from potentially devastating financial losses. Click here for independent contractor rules from the IRS.
