What Kind of Insurance Do 1099 Contractors Need?
As a 1099 contractor, you can be sued and held liable for damages just as easily as any other small business owner. This means that it’s important to get the right insurance protection for your needs. This is why at The Hartford, we offer General Liability Insurance for 1099 Contractors.
This insurance coverage is essential because:
- It helps protect you and your business. For instance, say you own a landscaping business. After mowing the lawn, you realize you damaged your client’s property. Your general liability insurance for 1099 contractors will help cover the costs associated.
- Your client wants insurance coverage. For example, say you meet with a client for a project. They’re excited about working with you but before they sign any paperwork they want to make sure you have general liability insurance coverage. If you did not have this coverage, they would be responsible for any damages that occur.
- The law requires it. The law is different depending on what industry you are in. For example, many construction businesses are required by law to have this coverage.
Who Needs 1099 Contractors Insurance?
Regardless of what industry you’re in, independent contractors typically need the same general liability insurance coverage. These contractors can include:
- Independent construction contractors
- Repair contractor
- House and carpet cleaner
- Freelance writers and editors
- Graphic designers
- Independent hair stylists and salon professionals
- Horse or dog trainers
How Do 1099 Contractors Get General Liability Coverage?
1099 contractors can get general liability insurance in two ways. They are:
- From their insurance provider. When you sign up for your policy, you can ask for a certificate of insurance. This certificate allows you to show a client that you are covered. This is typically the more cost-effective option for clients.
- From your client. Your clients can add you to the general liability insurance policy as an additional insured. This means you are covered during the duration of the job. This can be more expensive for clients depending on the situation.
Other Insurance Protection for 1099 Contractors
Depending on what you provide for services, you may need additional protection. Some additional insurance coverages to consider are:
- Commercial auto insurance. This coverage helps protect your business from auto incidents that occur. For instance, say you accidently crash your vehicle into a client’s fence, while on the job. Your commercial auto insurance will help cover the costs associated with fixing the property.
- Workers' compensation insurance. If you are in business for yourself but have employees, you most likely will need workers compensation insurance. However, the regulations surrounding this insurance coverage vary state-by-state. In some states, you need this coverage even when you don’t have any other employees.
- Errors and omissions insurance. Sometimes as a contractor you need to provide advice to your clients. For instance, accountants, financial planners, and even landscapers all provide advice to clients. This means you’ll need protection in the event that a client suffers a loss from your advice.
- Business income insurance. This coverage helps protect you if your business operation is interrupted. For instance, say a fire destroys essential equipment. While you wait for replacements, your business income insurance can help cover the loss of income your business suffers.
- Property damage insurance. Machinery and heavy tools can cause hazards when performing a job. This means that you’ll need protection for your client’s belongings. For example, while performing a plumbing job, you accidently cause water damage on the floor. Your property damage insurance can help cover the costs associated.