THURSDAY, JUNE 25, 2020
 Working for yourself as an independent contractor can be extremely freeing and rewarding. With the ability to choose your own clients and projects, you have more freedom in your line of work. Unfortunately, you also have more risk. Without an employer to provide insurance, you’re responsible for carrying the right amount of insurance in order to protect yourself and your business.
Even self-employed business owners must adhere to certain insurance requirements as dictated by their state. Be sure to check your state’s requirements to make sure you have the right insurance.
Common types of insurance that are dictated by your state include:
Commercial Auto Insurance
Commercial auto insurance provides coverage for work vehicles. Your personal auto insurance policy will not cover vehicles used for work purposes, even if you use a personal vehicle. Limit requirements change depending on your location.
In Texas, independent contractors using work vehicles must carry at least:
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$60,000 in bodily injury liability per accident
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$25,000 in property damage liability
This insurance can also include comprehensive, collision, uninsured motorist and other coverages normally available on your personal auto insurance policy.
Most independent contractors operate solely on their own. If you do choose to hire a subcontractor or employee, you may be required to carry workers compensation insurance. Every state in the U.S. aside from Texas has set requirements for workers compensation depending on the business’ size and industry.
Important Coverages Not Required
Not all insurance is required, but this doesn’t mean that you don’t need them. As an independent contractor, all liability and property damage expenses must come out of your pocket. It’s important to consider the risks you face to make sure you have the best policy for your business.
General liability insurance covers bodily injury and property damage accidents that occur as a result of everyday contracting activity. This coverage helps with medical expenses as well as legal fees.
Professional liability insurance covers claims regarding professional negligence. Professional negligence refers to accidents that occur as a direct result of an independent contractor’s offered specialty or service. For example, if a contractor installs a ceiling fan and faulty wiring causes it to catch fire, the independent contractor will be held responsible for the damages and injuries that come as a result. Professional liability insurance helps cover these costs.
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NOTICE: This blog and website are made available by the publisher for educational and informational purposes only.
It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
in your state. By using this blog site you understand that there is no broker client relationship between
you and the blog and website publisher.
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