Different Types of Contractor Insurance

In today’s increasingly digital and mobile society, a growing number of individuals are working as freelance contractors. Corporate downsizing has added to this trend as more and more companies hire outside contractors to perform work that was once done by employees. Many who are new to the contracting world are unfamiliar with the different types of independent contractor insurance coverage needed to do business safely and without exposure to liability risks.

Who Needs Independent Contractor Insurance?

There are numerous industries in which freelancers perform work regularly. Some of the most common types of independent contractors include:

• Construction Workers
• Home Services; such as electricians, plumbers, painters, cleaners and general handymen
• Interior Designers
• Landscapers
• Mobile Mechanics
• Pet Groomers
• Independent Hair Stylists
• Virtual Assistants
• Web Developers
• Freelance Writers and Graphic Designers
• Caterers
• Accountants
• Financial Advisors
• Real Estate Agents
• Legal Professionals
• Consultants

Depending on the industry, there are several areas in which a contractor needs to be concerned about exposure to lawsuits during their day-to-day business interactions. For example, construction workers typically bring heavy tools and machinery to a job site. This equipment can be dangerous and cause serious injury to others nearby. On the other hand, accountants, attorneys, financial consultants and other professionals need to be concerned with a client experiencing a negative result based on their recommendation. Contractors who cater weddings and other events in which alcohol is served have another concern; liquor liabilities. In most states, a server can be held at least partially responsible if someone being served becomes intoxicated and does harm to others.

Common Coverages for Independent Contractors: A freelance contractor should consider several areas of coverage; again depending on the industry in which they work. These include:

• General Liability: As the name indicates, this provides general protection against liability claims from third parties. A general liability policy typically includes coverage for bodily injury, property damage, personal injury (such as slander, libel, false advertising, and many others), product or service use injury and contract liability.

• Professional Liability: Also referred to as Errors and Omissions (E&O) insurance, this insurance protects professionals in the event of negligence, which ends up causing harm to others.

• Commercial Auto: If you use your vehicle in any way as part of your contracting work, commercial auto is another area of insurance you need to strongly consider.
  

Evaluate your Specific Needs

If you work as an independent contractor, it is important to have the right protection to fit your needs, without over-insuring and paying more than you should. The best way to find the right insurance policy for your circumstances is to speak with an independent insurance agent. Independent brokers have access to several of the leading insurers in your state, and can shop objectively to find you the best coverage at the most competitive rates.