Does a subcontractor need insurance?
Yes– business insurance is always a good idea, even if you aren’t legally required to have it. If you get paid to provide goods or services, then you are a business. And all businesses should be protected, even when they’re just starting out.
Insurance can also help you land bigger jobs. A lot of contractors will require you to have insurance if you’re going to do work for them.
Either way, you should protect yourself when you’re working. If something goes wrong on the job, business insurance can help protect you, and your assets.
Subcontractor Liability Insurance
Liability insurance is the most common type of insurance policy you’ll be asked to carry while working as a subcontractor.
General liability insurance, (sometimes referred to as “subcontractor general insurance”) is typically one of the most important policies for subcontractors to have. It protects you from a lot of common things that can go wrong when you’re doing subcontract work. This can include things like third-party lawsuits pertaining to medical costs, bodily injury, or damage to a client’s property. It also covers legal defenses and settlements, like court expenses lawyer’s fees, and punitive damages.
In short, a general liability policy will help cover:
- Bodily injury “slips and falls” (lawsuits and medical costs)
- Damage to someone else’s property
- Personal and advertising injury
Other types of liability insurance policies for subcontractors to consider:
- Professional Liability Insurance is important if you offer professional services or expertise to clients for a living.
- Cyber Liability Insurance is important if you handle sensitive customer information, even something as simple as credit card payments. This is especially important for IT subcontractors.
Most employers will expect you to have your own workers’ compensation policy, especially in physically risky industries, like construction.
Employers typically want you to be responsible for yourself while you’re working for them, in case you get sick or hurt on the job. That’s because they don’t want the financial responsibility of a subcontractor working for them who is not a full-time employee.
Business Auto Insurance
Your personal auto insurance most likely doesn’t include enough coverage for business-related accidents. If you drive vehicles owned by your business, or drive your personal vehicle on behalf of your business, you’ll need this coverage.
How much will it cost?
Probably less than you think. A small artisan subcontractor typically pays between $400 and $600 a year for liability insurance. Check out our detailed analysis of subcontractor insurance costs to see a full breakdown.
We can help you find the most affordable coverage and build a plan that fits your needs. We compare top insurers to find you the best protection at the most affordable price– for free. Just fill out a simple questionnaire, and we’ll get you covered.
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