Why Independent Contractors Need Their Own Insurance Coverage

Independent contractors may frequently be thought of as those working ad hoc construction jobs, but the term has evolved in the gig economy. Freelance designers, consultants, rideshare drivers and handypersons all enjoy the freedom of self-employment and may be considered independent contractors. However, with that freedom comes responsibility, especially when it comes to insurance coverage.

Importance of Contractors Insurance

Unlike traditional employees, independent contractors are typically not covered by an employer’s insurance policies. This means they are personally liable for any accidents, damage or legal claims that arise during the course of their work. Without proper insurance, a single incident could lead to significant financial loss or even bankruptcy.

One of the most critical types of insurance for contractors is general liability insurance, which can help financially protect against third-party claims of bodily injury or property damage. For those offering professional services, professional liability insurance can be essential to help cover claims of negligence or inadequate work. Additionally, commercial auto insurance is necessary for those who use their vehicles for business purposes.

Health insurance is another crucial consideration. Since independent contractors don’t typically receive employer-sponsored health benefits, securing a personal health insurance plan is vital to have access to medical care and protect against high health care costs.

Ultimately, having the right insurance coverage not only safeguards a contractor’s finances but also enhances their credibility with clients. Many clients and companies require proof of insurance before entering into contracts, making it a competitive advantage as well.

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By proactively managing risk, independent contractors can focus on growing their business with confidence. For insurance near you, contact Morais Agency.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.