Most independent contractors think general liability insurance is not mandatory for them, as they don’t work regularly and their business is small. However, despite the size of the company, things can go wrong. For example, your employee may damage someone’s property, or your business could be sued for slander/libel. In such circumstances, you will be liable for the losses if you don’t have general liability insurance. That’s why having broad liability coverage is crucial for independent contractors.
Who Is an Independent Contractor?
Types of Independent Contractors That Need General Liability Insurance
- Tutors and trainers
- Carpenters
- Freelance writers and editors
- Construction contractors
- Electricians
- Business consultants
- Plumbers
- Salon professionals
- Graphic designers
- Childcare workers
- Landscapers and yard maintenance companies
- Rideshare drivers
- House cleaners
Reasons Independent Contractors Require General Liability Insurance
General liability insurance for contractors is considered vital because:
- They are covered against lawsuits and resulting settlements if any third party sues them.
- Some industries are legally required to carry general liability insurance.
- Some clients may require you to have general liability coverage, so they do not have to bear the losses resulting from the liability damages caused by you, your employees, or your work.
How Do Independent Contractors Buy General Liability Insurance?
One way is you can buy the policy yourself. Once you accept the policy, request the insurance certificate from your provider to submit it to your client for proof. Another way is getting added as an “additional insured” to your client’s policy. An additional insured is any person or organization (besides the policyholder) covered by the policy.
Depending on the requirements, an additional insured can be added to a policy for the work duration or lifetime. However, an additional insured probably gets less coverage than what is offered to the policyholder. The range offered to the additional insured varies from policy to policy and provider to provider.
The below points will provide additional insureds:
- Defense Coverage – Covers legal fees, court fees, and settlement costs.
- Third-Party Lawsuits Coverage – Covers claims of third-party property damage, reputational harm, and bodily injuries.
When Can One Be Added as an Additional Insured?
An additional insured endorsement helps create extra financial and legal coverage between the policyholder and the victim. So, whether you are the client or contractor or even if you have your insurance, you can request the person/entity you work for to add you as an additional insured. This will help you file a work-related claim with their insurance policy while protecting your insurance coverage for your claims/damages.
What Is the Cost of General Liability Insurance?
- The location and size of your business
- The deductible you pay
- Your coverage limit
- Industry-specific risk exposures
- Types of coverages you may need
Though your client can add you to their policy, having your liability insurance coverage will allow you to work for multiple clients at a time while sufficiently covering you against every possible risk exposure of your business.
Protect Your Business with Chambers & Company Insurance Brokers
Whether you are a plumber, construction contractor, or electrician, we will offer a personalized yet affordable general liability insurance policy. Contact us today at Chambers & Company Insurance Brokers to get started with your insurance plans.