What is independent contractor’s protective insurance?


An independent contractor's protective insurance, also known as independent contractor's insurance, is an insurance coverage that deals with the payment and damages caused or brought about by the contractor.

An independent contractor works separately and thus will not be covered in the general contractor's or a company's insurance. That is why general contractors or companies that hire independent contractors usually require independent contractors to have this kind of liability insurance.

An independent contractor is held responsible for the work he does as well as for any mishaps that happen in the course of his performing a job for a client. Contractors and their employees can make mistakes and cause damage. These damages can be related to bodily injury or property damages. The following damages may also rise from operations and business dealings performed by independent contractors under the name of the insured or as a result of negligence actions, errors, omissions of contractors and professionals with which the insured name holds a contract.

This kind of protective insurance looks after the losses and damages caused by the independent contractor (and his employees) that are caused due to:

  • The contractor performing his duties
  • Acts of negligence or omission performed by the contractor (or his employees under his general supervision)

The independent contractor's protective insurance is similar to a general commercial liability insurance coverage because both of them offer products liability, bodily injury, personal injury, and advertisement injury policies:

  • Products liability refers to the damages caused by a project, product, or service offered by a contractor. This policy will cover all the deliberate losses related to your business.
  • Bodily injury covers any physical harm done to any worker or personnel by your contractor at the place of your business.
  • Personal injury covers the intangible damages caused by your business to another company or employee. Examples of which are cases of libel and slander.
  • Advertisement injury protects your business from copyright infringement, false claims, defamation, trademark issues and the likes.

The purpose of the independent contractor's insurance is to protect the contractor from liability claims and to protect his personal financial stability.

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