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Subcontractor Insurance Policy Information

Subcontractor Insurance

Subcontractor Insurance. As a 1099 subcontractor, one of the many questions you might have as it pertains to insurance is whether or not you truly need to purchase your own commercial insurance policies. The answer will vary.

In many instances, companies will not hire you if you do not carry subcontracting insurance; in other instances, companies will work with you as long as you signed paperwork and have a legal contract in place, stating if you do get injured (or if damage/loss ensues) they aren't liable. In many instances, the client (of a particular business that is considering contracting you) might also have liability requirements, and may not want to work with you if you do not have a subcontractor insurance policy in place.

Subcontractor insurance protects your 1099 contracting business from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked 1099 subcontracting insurance questions:

What Is Subcontractor Insurance?

Subcontractor insurance is a type of liability insurance that provides protection for independent contractors who are working for a contractor or business owner.

This type of insurance covers the subcontractor's liability for damages or injuries that occur as a result of their work, including property damage, bodily injury, and other types of losses. It also protects the subcontractor from claims of negligence or breach of contract.

Subcontractor insurance is typically required by the main contractor as a condition of doing business, and it helps to ensure that all parties involved in a construction project are properly protected.

How Much Does Subcontractor Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small subcontractors ranges from $37 to $79 per month based on industry, location, size, payroll, sales and experience.

What Does A Subcontractor Insurance Policy Cover?


When you are comparing insurers and the different subcontractor insurance policy options offered, of course you want to know what you are paying for.

What exactly is going to be covered/insured, when you choose a policy with a particular insurer?

Some of the coverage options you can include when choosing this type of insurance policy are:

  • General liability coverage to protect you against third part claims of bodily injury and property damage.
  • Damage/loss of property or equipment.
  • Injuries on the job site (as well as medical expenses).

You should also consider what type of work you are doing so you can decide if additional coverage might be required - like workers comp or umbrella excess liability. The truth of the matter is the level and types of coverage you choose will vary for each job and each client which hires you.

So the only way to truly know what you need, is to compare policies and learn about coverage options, based upon the type of work you perform as a 1099 subcontractor.

How Do I Choose The Best Fit Subcontractors Insurance?

Business insurance policies are complex and even if the price is lower with one insurer, this doesn't mean jump on board and purchase with them. Your subcontracting insurance policy is only as good as the company that is writing it.

How is their customer service? How fast can you get proof of insurance? It's important to choose a reliable insurer that has the coverages and limits you require.

So before you buy, make sure you ask relevant questions pertaining to your coverage:

  • Am I fully protected if I am at fault?
  • How long will it take until the policy claim is paid?
  • What if loss/damage occurs due to the negligence of another party (and what if they aren't insured)?

How To Choose The Best Insurance Company

As is the case with any subcontractor insurance policy you would purchase, when deciding on the insurer for your subcontractors insurance policy, comparison shopping is key. You should:

  • Compare liability levels and what is covered in the policy.
  • Understand what exclusions are in place.
  • Determine the value of the policy (injury, damage, loss, death, etc.)
  • Understand what is covered (equipment, other contractors, vehicles, etc.)

It is wise to determine the level of protection both needed and required as a 1099 subcontractor. Additionally if the companies you are hired by require you to purchase a subcontractor insurance policy - you must also have at least the minimum amount of coverage which is required by those companies.

What Does Subcontractor Insurance Cover & Pay For?

Subcontractor Insurance Claim Form

Subcontractors can be sued for a variety of reasons, including:

Breach of Contract: Subcontractors may be sued for failing to fulfill the terms of their contract with the general contractor or the owner. For example, if a subcontractor fails to complete their work on time, or performs work that is subpar or not up to code, they could be sued for breach of contract.
Insurance can help pay for the legal costs associated with defending against a breach of contract lawsuit. For example, a subcontractor could purchase errors and omissions (E&O) insurance, which would cover the costs of defending against claims of professional negligence or errors.

Property Damage or Personal Injury: Subcontractors can be sued if their work causes property damage or personal injury to others. For example, if a subcontractor accidentally damages a homeowner's property while performing work, they could be sued for the cost of repairing the damage.
Insurance can help pay for the damages or injuries caused by a subcontractor's work. For example, a subcontractor could purchase liability insurance, which would cover the costs of defending against claims of property damage or personal injury caused by their work.

Failure to Follow Safety Regulations: Subcontractors can be sued if they fail to follow safety regulations on the job site. For example, if a subcontractor fails to provide proper safety equipment for their workers, and an employee is injured as a result, the subcontractor could be sued for negligence.
Insurance can help pay for the legal costs associated with defending against claims of negligence. For example, a subcontractor could purchase general liability insurance, which would cover the costs of defending against claims of negligence or carelessness.

Misrepresentation: Subcontractors can be sued if they make false or misleading statements to the general contractor or owner. For example, if a subcontractor misrepresents their experience or qualifications to win a contract, they could be sued for fraud.
Insurance can help pay for the legal costs associated with defending against claims of fraud or misrepresentation. For example, a subcontractor could purchase commercial crime insurance, which would cover the costs of defending against claims of fraudulent activity.

In summary, insurance can help protect subcontractors from the financial impact of lawsuits. By purchasing the right type of insurance coverage, subcontractors can mitigate their risks and have peace of mind knowing that they are protected against unforeseen events.

Subcontractor Insurance - The Bottom Line

Of course these are not all the questions or concerns you have but should be discussed with your broker prior to choosing the policy you are going to purchase. The more you learn about a policy, what you are covered for (and to what extent) the easier it is going to be for you to make the right decision when the time comes to choose an insurance policy as a 1099 subcontractor in the field.

Additional Resources For Contractors & Home Improvement Insurance

Learn about small business contractor's insurance, including what it covers, how much it costs - and how commercial insurance can help protect your contracting business from lawsuits.

Contractors And Home Improvement Insurance

The contracting industry is a field that involves a lot of risks, both for the contractor and for the clients they work for. This is why commercial insurance is so important for contractors. Insurance can protect contractors from a variety of potential losses, such as:

Liability: If a contractor causes damage to a client's property or if a client is injured while on a job site, the contractor could be held legally responsible. Liability insurance can cover legal fees and any settlements or judgments that may be awarded.

Property damage: Contractors often use a lot of expensive equipment and tools, and there is always a risk that this equipment could be damaged or stolen. Commercial property insurance can help cover the cost of replacing damaged or stolen equipment.

Business interruption: If a contractor is unable to work due to an unforeseen event, such as a natural disaster, insurance can help cover their lost income during this time.

Workers compensation: If a contractor or one of their employees is injured on the job, worker's comp can help cover medical expenses and lost wages.

Overall, commercial insurance is an important risk management tool for contractors. It can provide financial protection against a wide range of potential losses, helping contractors to stay in business and continue serving their clients.

Minimum recommended small business insurance coverage: Business Personal Property, Employee Dishonesty, Contractors' Equipment and Tools, General Liability, Employee Benefits Liability, Umbrella Liability, Automobile Liability and Physical Damage, Hired and Non-owned Auto & Workers Compensation.

Other commercial insurance policies to consider: Building, Business Income with Extra Expense, Earthquake, Flood, Leasehold Interest, Real Property Legal Liability, Accounts Receivable, Builders Risk, Computers, Goods in Transit, Installation Floater, Valuable Papers and Records, Cyber Liability, Employment-related Practicesand Stop Gap Liability.

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