Public liability insurance for contractors. A complete guide.

Public liability insurance for contractors

As an independent contractor, having the right insurance and protection for your business is vital, even if you run a small operation.

Independent businesses should ensure they have adequate coverage, as liability claims can bankrupt a small business.

If you do not have public liability insurance, you run the risk of using your own funds to protect your business.

This guide about public liability insurance for independent contractors will examine why you are required to carry this insurance.

Table of contents

Public liability insurance for independent contractors
Independent contractors that require public liability insurance
What are the risks for an independent contractor without insurance?
What does public liability insurance cover?
When do independent contractors need public liability insurance?
Who’s responsible for adding an additional insured?
How do independent contractors get public liability coverage?
The process to get public liability insurance
Why do independent contractors need public liability insurance?
Other insurance types for independent contractors
Public liability insurance for contractors cost

Public liability insurance for independent contractors

Public liability insurance for independent contractors is also known as general liability insurance for contractors. It is essential coverage for independent contractors.

Without public liability insurance, independent contractors' job opportunities in the construction industry would be slim. There would be many construction jobs they couldn’t apply for.

This is largely due to potential clients requiring contractors to have public liability insurance before signing contracts.

Not only do employers require this, but independent construction contractors are often required by the area in which they work to carry public liability insurance.

As an independent contractor, you want to ensure that you and your small business are protected.

This insurance coverage protects you in many working situations. In this guide, we will cover everything there is to know.

Let's take a look at who needs public liability insurance.

Independent contractors that require public liability insurance

Here are some of the types of independent contractors who require public liability insurance:

Painters
Carpenters
Plumbers
Electricians
Graphic designers
House and carpet cleaners
Independent construction contractors
Freelance photographers
Freelance writers and editors
Independent PR consultants
Independent marketing consultants
Independent business consultants
Independent hair and cosmetic professionals

What are the risks for an independent contractor without insurance?

All independent contractors and the different industries they work in run different risks.

All independent contractors could be held liable if alleged claims were made. However, each situation will be unique based on their trade.

For this reason, public liability insurance for independent contractors covers various risks.

For example, a hair and cosmetic professional faces significantly different risks than a carpet cleaner. A cosmetic professional could be accused of copyright infringement for a new logo, while a carpet cleaner runs the risk of potential damages to a homeowner’s property.

Overall and conveniently for each trade, public liability insurance for independent contractors addresses both of these issues.

What does public liability insurance cover?

Even when it’s not a requirement, independent contractors may want to purchase public liability insurance to protect themselves against common risks of their trade.

Much like any other business or larger operations, independent contractors will be held liable for alleged claims. Therefore, they should be adequately covered.

Public liability insurance for independent contractors covers the following:

Advertising injury, including copyright infringement
Harm to business reputation following slander or libel
Third party bodily injuries or property damages when your business was at fault.

Unlike larger operations, independent contractors don’t have the financial means to deal with these types of lawsuits.

To mitigate that, public liability insurance for contractors ensures any legal costs or settlements are taken care of.

When do independent contractors need public liability insurance?

It may be required that contractors carry public liability insurance before they are hired.

Further, it may be required by the area where the construction work will be carried out.

Public liability insurance is a requirement in that it’s deemed essential for public safety while also legally protecting all parties involved.

Who’s responsible for adding an additional insured?

The answer to the question above largely depends on the scenario and the industry.

In most cases, a contract will usually determine whether the company must be added as the independent contractors’ additional insured or the other way around.

These are questions you can ask your prospective clients.

Let’s take a look at both options now.

How do independent contractors get public liability coverage?

Primarily, there are two ways for an independent contractor to get public liability coverage.

1. You can purchase your own policy

You can purchase public liability insurance from an agency and insurance provider as an independent contractor.

You can request a certificate of insurance from your agent to prove you are insured.

This option saves money for your prospective clients, which may be attractive to them. However, it isn’t always necessary.

2. Clients can add you to their policy as an additional insured

Being an additional insured on your client’s policy means their policy covers you. Typically, this is for the duration of your contract, but it could be longer.

Businesses can usually add several independent contractors to their liability policy.

This is a relatively expensive option for clients. However, depending on the circumstance, they may want to add you as an additional insured to their policy.

The bottom line

Both of these coverage options will protect you both against reputational harm, property damage, or third-party bodily injury.

The process to get public liability insurance

It’s a straightforward process to get public liability insurance coverage for contractors.

You can obtain commercial public liability insurance in a few simple steps.

Apply online

Getting a public liability insurance policy begins with applying. You can do this online.

You can prepare for the online application process by following these steps:

Set aside time to complete the application form
Have your personal and business information ready, such as the location and size of your business, the number of employees (if applicable), payroll, and revenue.
Have your questions ready, and contact an agent if you need help.

Speak to an agent

After your application is received, an agent will contact you to help you choose your policy.

At this stage, you might want to enquire about insurance packages, premiums, types of policies, and what’s covered.

Sign the policy

After you’ve chosen your policy, you will typically be sent the necessary documents by email.

You will then need to submit the signed documents and make your first premium payment to begin your coverage.

Advertise you’re insured

Once you have public liability insurance for independent contractors, you can start advertising yourself as an insured contractor.

You can usually download and print your insurance certificate to verify proof of coverage for your future clients.

Why do independent contractors need public liability insurance?

In summary, public liability insurance is essential for independent contractors for the following reasons.

It’s best practice to carry it. In certain industries, it is a requirement for safety reasons for independent contractors to carry public liability coverage, such as construction. It’s often advisable that both you and your client obtain separate policies.
This insurance protects you and your business. No matter their size, all businesses are held liable for alleged claims. Independent contractors can be sued for causing bodily harm, damaging client property, or advertising injury. They have the same legal obligations and liability exposures as any larger business, therefore, public liability insurance for contractors helps cover financial losses.
Clients require contractors to have this coverage. Clients may not work with you if you don’t carry public liability insurance. Without this insurance, they could be held responsible for alleged claims caused by your business. Therefore, it’s in your best interest to seek the right coverage for many reasons.

Other insurance types for independent contractors

The following business insurance types should be considered in addition to standard public liability insurance.

Professional Liability

Also called errors and omissions (E&Os) insurance, professional liability insurance protects you against professional business mistakes.

The risk level associated with your business affects the cost of your coverage.

Workers Compensation

This insurance type provides employee protection (if required) for those who get injured at work or become sick and unable to work.

It’s necessary even if you have one employee. You should purchase workers' compensation if you hire any number of employees.

Commercial property insurance

This insurance type covers your business assets, such as work tools and other work equipment you can’t work without. This includes both owned and rented business materials.

In addition, not only are owned properties covered. Commercial property insurance also protects rented office spaces.

Commercial Auto

This insurance type is essential if you use a business vehicle. Auto coverage will protect you if you're involved in an accident when driving for work.

If you are renting a car to drive for work or using your own car for work, hired and non-owned auto coverage will cover you.

Cyber liability insurance

This insurance coverage protects you if a client’s sensitive personal information is stolen, such as credit card information and bank details.

Contractors who accept credit cards should consider getting cyber liability coverage to protect their information from data breaches. This coverage will also protect your sensitive business information.

Business income insurance

Also known as business interruption insurance, this insurance type helps you recover any lost income.

If you are ever unable to work or open your business due to a loss covered by the policy (such as a theft or a fire), business income insurance reimburses you.

Public liability insurance for contractors cost

When it comes to public liability insurance costs, a few factors determine how much you have to pay, such as:

Your type of work
Your employee number
Your business revenue
The location of your business
The policy limits and deductibles
Your current and past claims history.
Independent contractors insurance

To find insurance policies to meet your needs, see the following links.

You can secure public liability insurance for contractors today.

Contractors insurance USA

For companies registered in the USA, you can receive quotations from Progressive Commercial.

Contractors insurance UK

For companies registered in the UK, you can receive quotations from Simply Business.

Contractors insurance Cyprus

For companies registered in Cyprus, you can receive a quotation from Pitsas Insurances by completing the quotation.

If you have more questions, contact our insurance experts and work with a licensed agent to determine your needs.

We offer customizable insurance coverage explicitly made for independent contractors.

Pitsas Insurances can work with your financial budget to help you secure public liability insurance for contractors.

To find out more about how our team of insurance experts can help you, see here.