Business Insurance for Independent Contractors
As an independent contractor, you have no employer safety net. Every client relationship is a direct liability. Here is what coverage you need to work with confidence.
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Coverage Types for Independent Contractors
These are the key insurance policies most relevant to your business type — ranked by importance.
General Liability
RequiredMost client contracts and 1099 agreements require proof of GL before work begins. Covers you if you damage client property, injure someone at a job site, or cause third-party bodily harm.
Professional Liability (E&O)
Highly RecommendedCovers claims that your services, advice, or work product caused financial losses to a client. Especially critical for IT contractors, consultants, designers, writers, and advisors.
Tools & Equipment Coverage
RecommendedCovers your owned tools and equipment against theft, damage, and loss. Personal property policies do not cover tools used for income. Inland marine or a BOP is required.
Cyber Liability
RecommendedIf you handle client data, access their systems, or deliver digital work products, cyber liability protects against breach claims and data loss events.
Disability Income Insurance
RecommendedIf you are sick or injured and cannot work, there is no employer paying you. Disability income replaces a portion of your earnings during recovery. Not a business policy but critical for contractors.
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What You Need to Know
- →As a 1099 contractor, you are a business — not an employee. Zero coverage comes from the client company.
- →Most Fortune 500 companies and government agencies require $1M+ GL proof before allowing contractor access.
- →Your homeowners or renters insurance does NOT cover work-related liability or professional errors.
- →A Certificate of Insurance (COI) is often required before a contract is signed. Get insured first, then negotiate.
- →Tax deductible: 100% of premiums are deductible as a business expense.
What Does It Cost?
Trade contractors (electricians, plumbers, HVAC) typically pay $45–$120/month for GL. Professional service contractors (IT, marketing, design) pay $29–$79/month. Adding E&O: add $30–$100/month.
Frequently Asked Questions
Frequently Asked Questions
What insurance do I need as a 1099 contractor?+
Does the company I contract for cover me under their insurance?+
How much does contractor insurance cost per year?+
Can I get insurance that covers multiple clients?+
Do I need workers comp as an independent contractor with no employees?+
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By clicking, you agree to Insurance Pro Agencies' Terms of Use and Privacy Policy, and authorize Insurance Pro Agencies, Inc and its affiliated carrier partners to contact you using the information you provide during the quoting process. Consent is not a condition of obtaining a quote.