Public liability insurance for contractors. A complete guide.
March 10, 2023
Ian Westwood
March 10, 2023
Ian Westwood
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 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.
Here are some of the types of independent contractors who require public liability 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.
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:
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.
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.
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.
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.
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:
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.
In summary, public liability insurance is essential for independent contractors for the following reasons.
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.
When it comes to public liability insurance costs, a few factors determine how much you have to pay, such as:
To find insurance policies to meet your needs, see the following links.
You can secure public liability insurance for contractors today.
For companies registered in the USA, you can receive quotations from Progressive Commercial.
For companies registered in the UK, you can receive quotations from Simply Business.
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.