Independent Contractors Insurance
What Does Independent Contractors Insurance Mean?
Independent contractors insurance is a policy designed for individuals who work for a person or entity but are not classified as employees. This type of insurance is often required by businesses when hiring third parties, as it helps absolve the hiring party of future liability, transferring the responsibility to the independent contractor instead.
Insuranceopedia Explains Independent Contractors Insurance
It can be difficult to distinguish between an independent contractor and an employee, but when it comes to insurance, the difference is clearer. Independent contractors are not entitled to worker’s compensation, which is a benefit typically available to employees.
Since independent contractors don’t receive worker’s compensation, they are required to obtain their own insurance, and in some cases, this may be mandated by law before they begin working.
Additionally, independent contractors may need liability insurance to cover legal expenses in the event of a legal complaint regarding the work they have performed.
