Meaningful work via independent contracting has many excellent advantages, with one of them having yourself as your boss! It also can come with a few heavy legal risks. If you happen to be sued, liability claims are costly, with one on the larger end being able to crush a small business that doesn’t have insurance as a safety net. Without the protection from general liability insurance, you’ll need to pay for pricey claims against your business with your hard-earned cash reserve. 

What is Independent Contractor Liability Insurance?

Independent Contractor Liability insurance is a type of general liability insurance for those who love to think (and perform!) outside of the box. Gig workers, drivers, carpenters, plumbers, painters, and other types of workers who have chosen to go into business for themselves can benefit from this type of coverage. General liability insurance is a form of small business insurance that takes care of claims of property damage and accidental injuries to anyone in your sphere of operation. Unlike traditional employee insurance provided by employers, independent contractors are responsible for securing the coverage that works best for them. 

The versatility of available independent contractor insurance allows professionals to take a close look and customize their coverage based on their business’s specific needs. Securing this type of independent contractor insurance not only safeguards financial interests but also boosts your level of credibility in the watchful eyes of clients. As the gig economy continues to thrive and many are seeking independent ventures, the relevance of independent contractor insurance is a hot topic.

What Types of Independent Contractors Need Business Liability Insurance?

Here are a few varieties of independent contractors who can benefit from obtaining general liability insurance:

• Handymen and carpenters
• Electricians
• Freelance editors and writers
• Graphic Designers
• House and carpet cleaners
• Independent business consultants
• Salon professionals and hair stylists
• Marketing consultants
• Painters
• Plumbers

General Liability Insurance for Independent Construction Contractors:

This type of coverage is a vital tool in managing the inherent risks and liabilities associated with doing business in the construction industry. Construction workers can frequently encounter risks that range from legal claims of bodily injury to property damage and other issues. General liability insurance provides a solid form of comprehensive coverage that protects you from the sudden financial impact of these circumstances. 

One of the primary advantages of general liability insurance is its ability to cover the costs that arise from sudden third-party claims. It could be a subcontractor, a client, or a passerby encountering a construction site or demolition. This type of coverage steps in to cover medical bills, legal expenses, and damages. Whether you’re on a very small residential renovation or a large commercial job site, contractors can customize their coverage to provide for unique risks that come along with each category. 

What Does Independent Contractor Insurance Cover?

One fundamental aspect of independent contractor insurance is the form of General Liability coverage.  This will cover:

• Property damage and injuries that your small business causes
• Reputational harm stemming from libel or slander
• Advertising injury and incidents of copyright infringement

What is Not Covered by General Liability for Independent Contractors?

Here are some elements of running a business that are NOT covered by the General Liability provision:

• Company vehicles
• Mistakes during professional rendering or judgment
• Damage to equipment and property
• Sudden theft of equipment and property
• Employee bouts of sudden illness and injury

Other Types of Insurance for Independent Contractors:

Independent contractors may want to consider adding other business insurance types alongside General Liability insurance that offer protection for the many facets of activity encountered within a typical day’s work.

• Commercial Auto Insurance: This form of coverage is for company cars along with commercial trucks and vans. A personal auto insurance policy will not provide coverage for activities that involve driving for business purposes.
• Commercial Property: Commercial Property Insurance will pay to fully replace or repair your business’s property if it’s stolen, lost, or damaged. This type of insurance is designed to also cover equipment, inventory, and other tangible assets from perils such as fire and vandalism. This insurance often includes coverage for business interruption, which reimburses lost income and operating expenses if the business is temporarily unable to operate due to a covered element.
• Errors and Omissions Insurance: Errors and Omissions Insurance, sometimes referred to as Professional Liability Insurance, is a specialized form of insurance that provides crucial protection for individuals and businesses who are receiving compensation for offering professional advice. This type of coverage will shield independent contractors from financial losses that result from various types of claims. Many different forms of consulting, legal services, and financial advising are the types of businesses that can have serious consequences in this regard.
• Business Interruption Insurance: This key form of coverage, also called Business Income Insurance, has seen increased popularity over recent years. Global events have vastly enhanced the appeal of this type of policy that will replace lost income if your company needs to temporarily close. Business Interruption Insurance is beneficial as it will assist in mitigating the dire economic impact of unplanned events while offering the basis for a speedy recovery.
• Worker’s Compensation Insurance: This is a critical safety net for both employers and employees. It will cover rehabilitation costs, lost wages, and medical expenses for unfortunate events or injuries sustained on the job. Several different jurisdictions will affect what type of workers’ compensation is needed for Worker’s Compensation Insurance. This type of coverage allows employees to focus on their work, without being constantly nervous about the potential threat of injury.

What’s a General Liability Insurance Certificate?

Once your coverage is official and underway, you can request a general liability insurance certificate from us here at the Alexander agency. This is an official document that spells out all the coverage types and limits of your policy. This certificate includes: 

• The insurance company name
• Your official policy number
• The policy’s effective date
• Deductible amounts
• Coverage limits

A successful and resilient freelance career can sustain an individual or a hard-working family for decades. After exploring the fine details about how this type of coverage can benefit you, we are thrilled to provide personalized guidance for contractors in these fields. We thrive on being a strategic ally and beacon of organization for so many business owners, and don’t want you to face uncertainty alone in your venture!