Working as an Independent Contractor: How to Protect Yourself

It is often difficult for independent contractors to determine what kind of insurance they need to protect themselves financially. This is often determined by the kind of work you do. Your work could involve desk work like digital marketing or data entry or you may provide home maintenance or construction services to others. There are many things to consider. Here’s how it works.

Coverage Is Essential For The Following:

  • Errors and omissions (E&O): A contractor who provides consultation and advice, such as an accountant, financial planner, interior designer, or landscape architect, faces liability risks when a client suffers losses resulting from the contractor’s advice.
  • Property damage and bodily injury: Plumbers and remodelers, as well as electricians who work with heavy machinery and tools, require coverage because of the risks of accidents resulting from power tools, defective equipment, and compressed gas.
  • Food and alcohol liabilities: Independent contractors serving alcohol and food at events may be held liable for potential illnesses or injuries associated with the food or alcohol they serve.
  • Disability and Medical: If you become ill or injured as a contractor, there is no group plan to cover your injuries, leaving you at risk for loss of income.

Understanding Type of Contractors

The type of independent contractor varies, but they all require coverage tailored to the specific risks they face. Among these professionals are:

  • Independent construction contractors
  • Carpenters, plumbers, painters and electricians
  • Dog and horse trainers
  • Repair Professionals 
  • Editors, graphic designers and freelance writers
  • Salon professionals and independent hair stylists
  • Carpet and House Cleaners

Liability insurance for independent contractors

Independent contractors can be held liable for damages, just like other small business owners. As such, it is important for them to consider purchasing general liability insurance. Without such insurance, they would have to bear the full cost of any damages that may arise from their professional activities. Having their own liability coverage is important as general liability insurance typically does not protect independent contractors or subcontractors. Therefore, both employers and independent contractors should have their own general liability coverage. The Hartford offers independent contractor liability insurance, also known as 1099 liability insurance, to help protect them and their contracting business.

Get the right contractors insurance by comparing options

It is extremely important to have a business insurance plan in place, especially if you are considering expanding your business, hiring new personnel, or taking on larger jobs and taking on greater risks. A trained professional can help you customize coverage to fit your business risks since there are so many options and types of coverage.

Among these trained professionals are:

  • Financial planners and accountants
  • Insurance agents
  • Attorneys

Additionally, there are many online resource guides that you can refer to, such as:

In each of these documents, you will learn about different types of coverage and tips for establishing your company safely and effectively.

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