An independent contractor provides a service to another person or a business. They do not work under another party. Still, independent contractors are running a business. As a result, they must maintain the proper business insurance products.
As an independent contractor, what are the types of coverage you should consider? The coverage your business needs can differ based on the type of business and the assets owned.
What Property Do You Own?
At the heart of any business insurance policy is asset protection. Independent contractors typically own all of the equipment for their work. Some operate out of a leased or owned space. Others will operate out of their home.
Property insurance will be the main component to any business insurance policy. It should represent all types of assets owned by the company. You need to be able to use it to replace your belongings following sudden losses.
General Liability Insurance
Like most other businesses, independent contractors will need general liability insurance. It covers your business against claims made against it by third parties. For example, if a client falls on the property or their property suffers damage due to your actions, this policy can help cover those losses. A key component of this should be bodily injury and property damage protection. Because risks exist in most businesses, having proper insurance.
Errors and Omissions Insurance
Many independent contractors provide advice or guidance. For those who work in any field where professional advice goes out, errors and omissions coverage can be necessary. This includes individuals who work in fields like interior design, financial planning, consulting or accounting. These individuals work closely with their clients. When a mistake occurs, this form of liability insurance reduces risks.
Workers Compensation Insurance
Some independent contractors will have employees. If you have employees, you may benefit from workers compensation insurance. It covers costs related to worker injury or illness. Some states may not require this type of coverage for very small companies.
Business Owner Policy
One way many independent contractors can reduce costs is with a business owner’s policy (BOP). A BOP is a type of insurance that links together several of the most common coverage elements you need. This usually includes property damage, liability and business interruption coverage.
Speak to your business insurance agent. Inform them as to what type of work you do. Find out what type of insurance is best to protect your business. Most companies will find proper coverage is available and affordable. It can help you stay in business. When a claim occurs, you’ll have the financial help you need to move beyond it.