Public Liability Insurance for Contractors: What to Know About Independent Contractor Insurance

Public Liability Insurance for Contractors: What to Know About Independent Contractor Insurance


When you put your heart and soul into your business, the last thing you want to think about is what might happen if you get sued.

But the truth is, lack of preparation can cost you. Regardless of whether or not you win, civil cases are notoriously expensive, and it leaves a mark on your business’s reputation.

That’s why we’re breaking down independent contractor insurance, particularly general liability insurance for contractors. Keep reading for everything you need to know before you find a policy to protect your business.

What is Independent Contractor Liability Insurance?

First things first: what is liability insurance for independent contractors?

General liability insurance covers a business in the event of customer injuries, property damage, and civil suits related to either. In fact, most businesses have liability coverage, because they need it to be able to sign contracts and commercial leases.

As an independent contractor, it’s one of the most essential insurance policies you can have.

What Does It Cover?

As an independent contractor, you have a number of considerations that make liability insurance vital. These include:

  • Bodily injury
  • Property damage
  • Errors or omissions
  • Employers liability

For example, contractors who work with heavy machinery and tools are at an unusually high risk of hazards and injuries due to power tools and defective machinery. Similarly, you need coverage in case a customer or other individual is hurt in relation to your business.

If you have any kind of staff on hand, you’ll also need liability insurance for them, as this coverage is compulsory in the UK. In fact, you could be fined 2,500 pounds every day you are not properly insured, and another 1,000 pounds if you do not display your insurance certificate.

Why Do You Need Contractor Liability Insurance?

The big point here is damages.

The entire purpose of general liability insurance is to protect you in the event of unexpected accidents, injuries, and damages. That coverage is attractive for a couple of reasons.

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Can Independent Contractors Be Sued for Damages?

Let’s get something clear: as an independent contractor, you can be held liable for damages, just like any other business. Without insurance, you’ll have to pay for the cost of those civil suits out of pocket.

Now, a graphic designer will face different risks than, say, a plumber–copyright infringement versus property damage. The good news is that general liability insurance protects you against either type of lawsuit.

As such, contractor liability insurance is one of the essential ways to legally protect yourself as a trade business owner.

Your Clients Want You to Have It

More than that, all your potential clients will feel safer hiring you if they know that you have general liability insurance.

This is because your liability insurance isn’t just about you. If you don’t have liability insurance, the people who hire you may be held liable for damages incurred during your work.

Even if you aren’t crazy about footing the bill, your customers don’t want to pay for damages either. Save trouble for both of you by getting insurance.

You May Be Legally Required to Have It

In addition, you may be legally required to have some form of liability protection before you’re allowed to operate as a business.

In fact, certain industries demand that you have insurance no matter what. Construction is an easy example.

Even if your client has liability insurance, you may need to have your own policy anyway. If you’re not sure about the legal rules, check in with a lawyer to see what you’re legally obligated to do.

Who Needs Independent Contractor Insurance?

As we noted earlier, there are many different types of independent contractors out there who face different types of risks.

However, each of these different contractors needs liability insurance. A few examples include:

  • Construction contractors
  • Plumbers
  • Electricians
  • Carpenters
  • Repairmen
  • Painters
  • House and carpet cleaners
  • Freelancers, including writers, graphic designers, web designers, and editors
  • Independent salon professionals
  • Dog trainers

Keep in mind, however, that this isn’t an exhaustive list by any means. If you’re an independent contractor, it’s generally a good idea to investigate liability insurance for your business.

After all, better to be prepared and never use it than have your business crippled by an unexpected lawsuit.

How Do You Get General Liability Insurance?

With that in mind, let’s talk about how independent contractors can get general liability insurance.

In general, there are two ways to acquire general liability insurance:

  1. Get your own policy
  2. Get added to your client’s policy as an additional insured

There are benefits to each, depending on the situation.

Get Your Own General Liability Policy

The first option is the most obvious: getting your own policy.

You can purchase general liability insurance from most insurance providers. This is usually the most cost-effective for your clients and it ensures that you get the coverage you want.

To show that you have a policy, request a certificate of insurance from your provider to show to your clients.

Get Added to Your Client’s Policy as an Additional Insured

The other option is to be added to your client’s policy as an additional insured. Essentially, this means you will be covered under your client’s policy for the duration of the job.

Businesses can do this (and can add multiple contractors) but it’s generally more expensive for them to do so and thus less attractive for many would-be customers than hiring a contractor who already has their own coverage.

Get an Insurance Quote

Knowing what you know now, are you ready to find the right independent contractor insurance policy for your business?

If so, we’re here to help.

Click here to get an insurance quote. Or, if you need more guidance and ideas, take a look at our blog, like this post on the next steps when legal action is taken against your business.

Tradesman Saver provides insurance for contractors. Click here for information on Public Liability Insurance

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