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Independent Contractor Business Insurance

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Recommended insurance policies for independent contractors

The clients you work for and the type of work you do will determine the coverage you need. These policies cover the most common risks for independent contractors who work in the tech industry.

General liability insurance

General liability insurance icon

This policy protects independent contractors from the basic risks of working with clients. It's often required by client contracts and commercial leases.

  • Accidental client injuries
  • Accidental damage to client property
  • Libel and other advertising injuries

Errors and omissions insurance

Errors and omissions insurance icon

Errors and omissions insurance (E&O) protects independent contractors from legal costs related to their work performance. It's also called professional liability insurance.

  • Mistakes in your work
  • Failure to deliver promised results
  • Accusations of negligence

Cyber liability insurance

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This policy provides independent contractors with financial protection against data breaches and cyberattacks. Bundle it with errors and omissions insurance in a package called tech E&O.

  • Customer notification costs
  • Credit monitoring services
  • Data breach lawsuits

Workers' comp insurance

Workers’ compensation insurance icon

Workers' compensation insurance provides crucial protection against work-related medical costs, which health insurance could deny. Clients may require it in a contract.

  • Work-related medical bills
  • Disability benefits
  • Client contract requirements

Business owner's policy

Business owner’s policy icon

A BOP combines general liability coverage with commercial property insurance at a discount. It protects independent contractors from common third-party lawsuits and property damage.

  • Accidental client injuries
  • Accidental damage to client property
  • Damaged or stolen business property

Professional liability insurance

Professional liability insurance icon

This policy, also called errors and omissions insurance (E&O), protects small businesses that provide professional services or advice. It covers lawsuits related to work performance.

  • Work mistakes and oversights
  • Professional negligence lawsuits
  • Late or incomplete work

Commercial property insurance

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This policy covers the cost of property damage caused by incidents that are out of your control. Many commercial landlords require this coverage.

  • Extreme weather
  • Fire
  • Theft and vandalism

Commercial auto insurance

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Most states require that you carry commercial auto insurance for vehicles owned by your freelance business. This policy covers costs related to an accident involving a business vehicle.

  • Medical bills from an auto accident
  • Property damage caused by your vehicle
  • Vehicle theft and vandalism

Fidelity bonds

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A fidelity bond compensates the injured party if an employee steals money or assets. Clients might require freelancers to buy a bond in the terms of a contract.

  • Employee theft
  • Employee fraud
  • Illegal funds transfer

How much does independent contractor insurance cost?

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Factors that affect premiums include business income, types of insurance purchased, and deductibles. From our customer data, here's a quick look at average costs for independent contractors:

General liability insurance: $42 per month
Tech E&O: $61 per month
Workers' comp: $45 per month
View insurance costs for independent contractors.

Start a free application to see property and liability insurance costs for your business.

Independent contractor insurance requirements

Sometimes independent contractors, general contractors, and subcontractors (like electricians and handyman) are required to carry their own insurance. When you carry insurance, your clients gain peace of mind knowing that your business can handle a lawsuit, so any issues won't escalate to affect them. You can also ask clients to include you as an additional insured on their policy.

You may need insurance to fulfill the terms of a contract. Clients might require you to carry E&O insurance or workers' compensation to avoid potential legal costs or medical bills. Your landlord may also require a certificate of insurance as proof of general liability insurance or commercial property insurance.

You may need insurance to comply with the law. Vehicles registered to businesses must be covered by commercial auto insurance. This policy covers the cost of property damage, medical bills, and lawsuits if you get into a car accident. If you drive your own car for work (e.g., a carpenter's van), you'll want hired and non-owned auto insurance instead. This policy is less expensive and pays for your liability in using a personal, leased, or rented vehicle for work.

Bundle insurance policies to save money

Independent contractors can save money on commercial insurance coverage with two packages common in the IT industry.

A BOP combines commercial property insurance with a general liability policy.

A general liability insurance policy is the coverage that most small business owners purchase first. It covers basic third-party (non-employee) liability claims, including bodily injury and property damage. The policy is especially beneficial for independent contractors who invite the public into an office or storefront, handle delicate client equipment, or have an active social media presence.

Commercial property insurance is critical for protecting your work equipment and your building, if you own it. This policy is valuable even if you’re renting an office space, as your landlord’s policy won’t cover your company’s belongings.

Tech E&O combines E&O and cyber liability insurance.

This policy is crucial for independent contractors in the tech industry and professional services, as it covers the cost of lawsuits over the quality of your work, including any security recommendations. It bundles errors and omissions insurance with both forms of cyber liability insurance:

First-party cyber liability insurance helps independent contractors recover from data breaches and cyberattacks. It covers the cost of credit monitoring services, crisis management, and cybersecurity incident investigations.

Thirty-party cyber liability insurance protects independent contractors if a client sues you for failing to prevent a data breach or cyberattack at their business. If you find yourself in this kind of dispute, it covers legal defense costs, settlements, and court-ordered judgments.

Chat with an insurance agent to find out more about bundles and discounts.

Compare insurance quotes for independent contractors

With TechInsurance, independent contractors can compare quotes from top-rated insurance providers with one easy application. Get free quotes for affordable business insurance policies that match your unique risks.

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