NYC Insurance Blog

Contractor Liability Insurance: A Guide for Small Business Owners

If you run a small contractor business, it is essential to guarantee the welfare of the contractors you hire. As an independent contractor, it is possible to add other contractors to your insurance coverage as additional insured. Depending on the period you intend to hire these contractors, you can insure them for a single project, year, or if you continue paying the insurance policy. However, you must talk to your insurance company to adjust your premiums.

Do you own vehicles primarily used to operate your business? If yes, you need business auto insurance. Your personal auto policy will not provide coverage if a business-owned vehicle is involved in an accident. Therefore, if your independent contractors drive cars owned by your business, ensure they are covered because you may be held responsible if they damage property or injure other people. Commercial auto insurance covers medical expenses, repairs, and legal fees if your vehicle is involved in an accident. Remember, as a small business owner; you can be held responsible for damages caused by an employee if they are not insured.

Types of Insurance Policies You Should Invest in to Cover Your Independent Contractors

General liability insurance

This is one of the coverages all small business owners must invest in because it is usually required before signing a lease or contract. The policy also helps cover property damage, reputation injury, and customer/client injury. Whether you just started your business or looking to expand, general liability insurance is a must-have. You do not want to be denied a lease or lose a contract just because you lack insurance. Having the right kind of coverage is very important, give us a call to get a free quote today.

Workers’ Compensation

This coverage is a legal requirement in almost all states in the US. Workers’ comp provides coverage to employees if they get sick or injured at work. The policy covers medical costs and missed wages if an employee cannot work from illness or injury sustained. If the employee dies from work-related illness or injuries, the policy covers funeral costs and provides death benefits to the beneficiaries. 

Professional liability insurance

When offering professional services, you should carry out this policy. Also known as errors and omissions insurance, this policy can protect you from mistakes made by your contractors. For example, if a client sues you or your customer for offering poor advice, this policy will cover all the legal costs. 

Hired & Non-Owned Auto Insurance

As a small business owner, you may rent, lease or use your personal car or equipment to run your business. If that’s the case, consider purchasing this policy to protect yourself from potential liability if you or your employees/contractors are involved in an accident. 

Performance bond

Just like having general liability insurance, some clients only work with contractors with a surety bond/performance bond. The policy acts as goodwill between you, your insurer, and your client. If, for whatever reason, you cannot deliver on a contract, your insurer covers the client’s loss by paying the bond amount. Your client will not incur a loss even if you fail to deliver as agreed. Your reliability, level of experience, and professionalism are some of the factor’s insurance companies consider determining your premium. Making sure you and your employees & independent contractors are covered by insurance is important. Let us Guide you today!

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