Independent Contractors Liability Insurance

If you're working as an independent contractor in any aspect of the construction industry, you're probably aware that you need insurance coverage over and above what your general contractor is required to carry. In fact, many independent contractors are underinsured, simply because they don't know how much liability coverage they truly need.

Independent contractor liability insurance is in many ways similar to the insurance policies that general contractors carry. General liability insurance coverage with a limit of at least $1 million is not only recommended, but mandatory for many independent contractors. Also, some form of disability insurance is recommended, in case of an injury on the job. In many states, general contractors are not required to provide worker's compensation or disability insurance coverage for non-payroll employees. Also, an independent contractor's liability insurance portfolio should include commercial auto insurance or enhanced personal auto insurance coverage, as well as inland marine insurance if the independent contractor is required to transport or ship their own equipment from job site to job site.

No matter what area of the construction industry you serve, you can't afford to be underinsured. The insurance professionals at contractorsinsurance.org can help you find the coverage you need at the right price. For more than 25 years, we have partnered with an elite team of affiliates to help people just like you find the right independent contractors liability insurance.

The Coverage You Need

Although independent contractors work independently, that doesn't mean that they need less insurance coverage. In fact, it means just the opposite. While a corporation has assets that can offset personal costs to the principals in the event of a lawsuit, independent contractors need insurance coverage extensive enough to prevent the seizure of personal assets in the event of litigation.

General liability insurance is a must for all independent contractors. Many general contractors - or their clients - require all independent contractors to possess liability coverage of $1 million or more. This type of independent contractors liability insurance covers a broad spectrum of possible situations, including bodily injury, property damages, personal injury, and even hired and non-owned auto coverage in some cases. Coverage differs depending on the individual policy, but an insurance professional can perform a risk assessment to determine how much coverage you need in each area.

Depending on your area of expertise, it may also be advisable to add professional liability coverage to your independent contractors liability insurance. Professional liability coverage, unlike general liability, covers professional errors and omissions. In certain states or for certain jobs, you may be required to carry this insurance, especially if the majority of your work is in a technical field, like engineering.

If you are working for a general contractor, the issue of bonding may be raised. There are several bonds that may apply to the independent contractor. Subcontractor bonds offer the assurance that the independent contractor will complete the contracted work on schedule and to the satisfaction of the general contractor. The bond premium for these bonds is usually paid by the independent contractor and may in many cases be obtained through the independent contractors insurance agency. Conversely, contract bonds protect the independent contractor from nonpayment on the part of the general contractor, and premiums are paid by the general contractor. Some projects may require independent contractors to carry employee dishonesty bonds, also known as fidelity bonds, to protect the general contractor from theft of monies or documents. Usually, bond premiums cost about one to three percent (1-3%) of the total bond amount, although bonds considered high-risk may have premiums as high as five to twenty percent (5-20%).

Your independent contractors liability insurance portfolio should also include commercial auto insurance, if you use your own vehicle to go back and forth between job sites. Commercial auto insurance provides higher coverage in the case of an accident, however some commercial policies require the vehicle to be titled to your business. If you're working as a sole proprietor and have no legal business name, you might consider adding additional coverage to your existing auto insurance policy, in order to protect your personal assets in the event of an accident.

No matter what type of independent contractors liability insurance you need, we can help you find the right coverage at the right price. For more information, click for a free quote or call our insurance specialists at (516) 294-1072 today.