Do contractors need business insurance?

Yes. If you’re providing goods or services, and getting paid for it, then you are a business. And all businesses should have the right protection. If something goes wrong on the job, business insurance can help protect you, your assets, and your employees, if you have any.

What types of insurance coverages are best for contractors?

Workers’ Compensation: Because a lot of your work is physical, workers’ compensation insurance is definitely something you’ll want to consider.

General Liability: General liability is also important because there are miscellaneous risks involved regarding work environments and client interactions.

What is workers’ compensation insurance?

Workers’ compensation protects you and your employees should someone get hurt or sick on the job.

Policy benefits include:

  • Reimbursement for lost wages
  • Medical costs incurred due to illness or injury
  • Return to work and recovery services
  • Employers liability coverage, should an employee file a lawsuit
You may be thinking, “I don’t have any employees, so I don’t need workers’ comp, right?” Well, that’s not entirely true. You can still get a workers’ compensation insurance policy for yourself. It’s worthwhile, because if you fall ill or get injured on the job, your policy will help you get back on your feet.
Related: Do I need workers’ comp if I have no employees?
If you’re a one-person business and you’re suddenly out of commission, not only will you have to pay all medical expenses out of pocket, but you’ll also miss out on the money you would have been making had you been at work. That’s why workers’ compensation insurance is so great. It can cover these types of costs.

Read: Guide to Self-Employed Workers’ Comp
The most costly workers’ comp claims are from motor vehicle crashes– averaging $69,206.
Workers’ compensation helps with the bills so you could go to the movies 3,682 times instead (including that large popcorn).

What about general liability?

General liability insurance is necessary for contractors because of the types of risks they face.

GL coverage protects you against:

  • Bodily injury, like if someone trips over one of your tools and sprains their ankle.
  • Property damage, like if you’re repairing someone’s faucet and crack their porcelain sink.
  • Personal/advertising injury, like if you tweet how cheap or annoying a client is, and they claim libel.
General liability is a kind of catchall policy for many of the random things that could go wrong when it comes to running a business. Not only does this policy protect you from both physical and non-physical risks, it also covers legal defenses and settlements, like lawyer’s fees, court expenses, and punitive damages.
Liability insurance helps protect you when someone claims you did something wrong.

Are there any other important insurance coverages for contractors?

Yes. Here is a quick overview of other policies that benefit contractors:

    • Business property: Protects commercial property from theft, fire, natural disasters, and vandalism. It can also cover loss of income in case such property damages prevent you from working in your office. Quick note: If you keep your work gear at home, don’t depend solely on your homeowners insurance to cover your work items. Typically, the policy will only cover up to $500 in business property damages.
    • Inland marine: Business property insurance is great, but it typically only covers your work items within 500 feet of your business premises. If you are bringing your tools to job sites, consider this coverage– it will keep the items protected in transit.
    • Business auto: A business auto policy will protect vehicles owned by your business.
    • Hired & non-owned auto: This auto policy protects your company against accidents involving vehicles you rent, borrow, or hire for work. It also covers your company against non-owned vehicle accidents, such as employees that use their personal vehicles on behalf of your business.

So, what are you waiting for?

Talk to an agent or get a quote.