NYC Insurance Blog

8 Must-Have Insurance Policies for Independent Contractors

If you are an independent contractor, it is important to protect yourself, your clients, and your business when things go wrong. Your insurance needs and costs vary depending on your profession. Although no one size fits all, good contractor's insurance should protect against lost income, lawsuits, accidents, and lost, damaged, or stolen tools. This article will cover eight must-have insurance policies for independent contractors. 

Commercial general liability insurance

This policy protects your business from damages caused to third parties. Commercial general liability insurance protects independent contractors when found guilty of property damage, bodily harm, reputational harm, advertising injury, etc. General liability covers compensation and legal fees incurred during the litigation process. Remember, depending on the size of your company; you might purchase additional coverage to cover specific areas not covered in the general liability insurance. 

Commercial auto insurance

If you use or own vehicles for business operations, you need this policy because your personal auto insurance cannot provide protection. This policy protects you from liability if there's an accident and you or your employee is at fault. Therefore, the policy will cover all the costs if there is property damage or bodily injuries after an accident. Knowing your coverages is important, therefore having a Broker can make this an easier task!

Workers compensation insurance

If you have more than one employee, purchasing workers' compensation insurance is crucial. Although the policy varies from state to state, it usually offers 'no-fault' coverage. 'No-fault' coverage means the employee can get compensation regardless of who is at fault. Since the employee's lost wages and medical expenses are covered, they cannot sue the employer. 

Tools and equipment insurance

If your tools and equipment are stolen or damaged, it can affect normal running operations, especially if they are costly to replace or repair. Tools and equipment insurance covers repairing or replacing your tools and equipment to avoid halting operations. 

Builder's risk insurance

This policy protects the property and construction materials while working on a project. Independent contractors can purchase builder's risk insurance for installation projects, new projects, and remodeling/renovation. Since anything can happen on the construction site, for example, vandalism, fire, theft, and poor weather conditions, a builder's risk insurance can protect you from financial losses. 

Contractor's disability insurance

Independent contractors are prone to injuries affecting their income. Disability insurance is crucial because it provides coverage for lost income and business expenses if the unexpected happens. Carefully plan and consult an expert to determine whether you should invest in long-term or short-term coverage. 

Inland marine insurance

Independent contractors transporting their tools or equipment to construction sites using trains, cars, or trucks should purchase inland marine insurance. The policy protects your business property during transit. Accidents or theft can occur when transporting your company's property or materials. Inland marine insurance offers peace of and financial protection to contractors. 

Umbrella Insurance 

Construction is risky, and it is important to ensure you buy sufficient coverage. With umbrella insurance, independent contractors get additional liability to increase the insurance limit on their existing policies. Consider getting umbrella insurance if you work on a risky project or area or own significant assets. 

In conclusion, there are numerous insurance policies independent contractors should consider purchasing to protect themselves, their employees, their clients, and their business. Contractors should consult experienced insurance agents to know the policies they should buy. Finally, business needs vary; what fits you might not suit someone else. Therefore, take your time researching and understanding what you really need to avoid spending a lot of money or exposing yourself to liabilities. Get a Free Quote with us Today!