Does Your Business Insurance Cover Independent Contractors?
As a contractor, you may have subcontractors working for you on job sites. Does your contractor liability insurance cover subcontractors? Not typically. It would be used to cover your full-time employees.
You can add coverage for a subcontractor(s) as an “additional insured.”
The coverage of independent contractors under your business insurance policy can vary based on the type of insurance and specific terms of your policy.
It’s recommended that subcontractors get their own insurance to protect themselves.
If you are working as a subcontractor, it’s important to check with the contractor to see if you are covered under their policy or not. If you don’t have any insurance, you may not be able to work on projects.
How your insurance may cover independent contractors
Additional insured: In some cases, businesses can add independent contractors as additional insured parties under their liability policy for a specified duration or project. This arrangement provides coverage for the contractor while working on your behalf.
General liability insurance: Depending on the policy, your general liability insurance might extend coverage to independent contractors for certain liabilities arising from their work for your business. Typically, this is uncommon.
Professional liability insurance: If the independent contractor's work involves professional services (such as consulting, advising, or providing expertise), your professional liability insurance might offer coverage for certain claims or damages related to their work.
Contractual agreements: Insurance coverage might also depend on the terms outlined in the contract or agreement between your business and the independent contractor. Sometimes contracts specify insurance requirements or outline the extent of coverage needed.
Errors and omissions insurance: If the independent contractor provides services where errors or negligence could occur (such as consulting or advising), errors and omissions insurance might be necessary to protect against claims resulting from mistakes in their professional services.
Did you know? A subcontractor without insurance can face various legal, financial, and professional consequences. You may have trouble getting hired as a subcontractor by a general contractor without your own insurance.
Western Financial Group has business insurance experts who can help you protect your business and get you insurance at the right value for you.
