For independent contractors to become attractive to potential clients, it is important to offer something more than proficiency. Clients look beyond proficiency as they compare their options. One of the ways independent contractors can gain an edge is by getting insurance policies. Clients prefer dealing with independent contractors who have insurance protection.
The following are some of the top independent contractor insurance policies.
● Professional Liability Insurance - This is the policy that serves as a buffer in case the service rendered by an independent contractor is deemed defective. Also known as professional indemnity insurance (PII) and errors and omissions (E&O), a professional liability insurance policy protects independent contractors from having to bear the full cost of dealing with a client’s negligence claim. This policy is especially useful for those who provide services and professional advice. It covers costs arising from the alleged failure of the contractor to perform the agreed service or to deliver the said service according to the terms of the contract. It may also cover legal defense costs.
A professional liability insurance with a coverage of up to $1 million is usually good enough for most independent contractors. This is typically enough to serve as a buffer for any client claim that may threaten to disrupt a contractor’s business operation.
● Workers’ Compensation Insurance - This insurance policy is intended to provide a replacement for the wages and medical benefits of employees who are injured while doing their job. This insurance policy is usually given in exchange for the employees’ renunciation of their right to sue their employers for negligence. It is like a compensation bargain agreement between employees and employers.
Workers’ compensation insurance is not limited to employer-employee relationships. It can also be between contractors and workers. If you are an independent contractor who hires workers on a regular basis, it would be good to have this type of insurance to protect your business and your employees if anything untoward happens in the course of a project. This insurance policy, however, does not cover punitive damages resulting from employer negligence. It is generally not provided as part of compensation plans for employees or workers. You can consult a workers comp law firm if you need any legal assistance about it.
● General Liability Insurance - Lastly, it would also be advisable to get general liability insurance. Also referred to as business liability insurance, this is intended to protect a business from general claims particularly in relation to damage to property and bodily injury. It usually covers medical expenses as well as legal fees. It may also cover damages to the rented property of a business. General liability insurance, however, does not cover employee injuries, car accidents, professional errors, and punitive damages.
Insurance is important for independent contractors. It’s something that is not only used to protect a business. It is also something viewed as advantageous by potential clients. With Thimble, contractors don’t have to commit to long term, expensive policies, though. They can access flexible Contractor Business Insurance through the Thimble app and customize their coverage down to the hour, day, week, or month.
Moreover, an independent contractor that obtains the three insurance policies discussed above is also protecting workers, something every responsible business is expected to do.