If you work in the construction sector or in another industry independently, you need to protect yourself. Labor insurance is mandatory in almost all of the United States to have a license as a contractor.
Learn here the benefits of having work insurance, the prices, and how to obtain one to avoid facing high expenses in the event of an incident.
What is insurance for contractors and what benefits does it have?
Work insurance protects you while you work and perform as a contractor so that you have a way to respond legally and financially if you have an accident at work, injure other people, or damage something.
For example, if you fell or broke a glass while doing construction work and injured yourself and others, your insurer will pay the medical bills of those affected. In addition, it can also help repair any damage you have caused to the property.
In short, contractor insurance will help you:
- Cover damages from accidents and mistakes made on the job site
- Protect you from lawsuits and any legal proceedings
- Pay medical expenses in the event of an accident
- Pay lost wages due to disability or injuries
Types of work insurance
If you work as a freelancer or have a business, it is best to have civil liability insurance as a basis. However, you can purchase other coverage, such as commercial vehicles, in case your business needs to transport high-value merchandise.
Remember to talk to your agent to find out which coverage is best for your job and risk level.
What does civil liability insurance cover for a worker?
- Bodily injuries: Pay for injuries to third parties as a result of your work.
- Property Damage: Pay for damage to third-party property while you perform your jobs.
- Advertising damages: Covers lawsuits for copyright violation.
- Medical expenses: Pays medical bills and expenses for injuries to third parties.
- Damage to rented premises: Pay for repairs or damages to the premises you are renting to work.
Other insurance that you can obtain for your business or work are:
- Insurance against errors and omissions
- Insurance against bad practices
- Workers Compensation
- Commercial auto insurance
- Tool coverage
How to get work insurance?
Having your policy is very simple and will only take a few hours. To do this you must choose the appropriate coverage and provide the following information:
- Name of your company or business
- Type of activity you do
- How long have you been an independent contractor?
- Claim reports
- Work experience in the industry
- Number of company employees and payroll
- Gross income from your business
- You the firm
Keep in mind that you can take out your insurance on your own or you can also ask the client to add you to their liability policy depending on your situation, but this is not profitable for them.
How much does work insurance cost?
Business or work insurance can cost on average between $650 and $1,570 a year. However, the exact amount you pay for your civil liability insurance will depend on the type of work you do and its level of risk, added to other factors such as:
- Your income
- Whether you have employees or not
- The amount of coverage
- The area where you work
- Your business’s claims history
Contractor Insurance Price
| Total revenue | General Liability Policy Limits: $1 million per occurrence, $2 million total*. |
|---|---|
| $250,000.00 in income | $1,289 annual premium |
| $500,000.00 in income | $2,365. premium annually |
| $1 Million in revenue | $4,232 annual premium |
| $2 Million in revenue | $7,455 annual premium |
| $3 Million in revenue | $10,227 annual premium |
How many limits can I take out on my work insurance?
The lowest limit you can get on average from a contractor general liability insurance policy is typically $1,000,000 per occurrence and $2,000,000 total. Although you should always check if your state allows lower limits.
Don’t forget that depending on the work you do, you may need higher or lower limits. So ask an expert agent which option is best for you.
In which sectors should you have insurance for contractors?
If you work in any of these sectors, then you may want to have contractor insurance:
- Electricity
- Construction and remodeling
- Air conditioning
- Paint
- Plumbing
- Floor covering installation
- Wall cladding
- Carpentry
- Landscape and Lawn Maintenance
- Concrete or paving
Do I need to have work insurance if I am a subcontractor?
Yes, you must have work insurance in addition to your license to protect yourself against any mishap that falls under your responsibility.
Otherwise, you might have to face several problems while doing your work. For example, a delay in work that prevents you from complying with the contract or damage to equipment under your care.
