For those that are skilled in a specific trade becoming an independent contractor could be a great option. Independent contractors that are skilled and do good work can earn a great living and also be their own bosses. When you are looking to become an independent contractor, there are many important factors that need to be taken into consideration.
One very important decision to make is deciding on the right insurance policy to cover your business. One type of insurance that all contractors should have is liability insurance for contractors policy that will provide valuable liability coverage. There are several situations in which you will need to have a proper contractors liability insurance policy in place.
When You are Bidding on Jobs
One situation in which you will need to have a contractor’s insurance policy in place is when you are bidding on new jobs. Customers that are looking for contractors to complete any type of job will want to make sure that the contractor is fully licensed and insured. Customers will want you to have liability insurance as it will provide protection to the customer in the event you make a mistake while working that causes damage. It will also provide you with coverage in the event someone is injured while working on the job. If a contractor does not have liability coverage, the property owner could end up being found liable for any damages of injuries.
When Completing Certain Jobs
Depending on where the contractor works, liability insurance will be a requirement in order to legally complete a job. Depending on the type of work that you will do, legally accepting and working on a job will require you to have current certification and licensing in place. In most areas, getting the license that you need to work as a contractor will require that you have a proper liability insurance in place.
When in Need of a Loan
For contractors to grow their business, taking out a loan could be a necessity. Taking out a business loan could provide someone with the right amount capital needed to purchase inventory, equipment, lease business space, or expand the operations. When you are taking out a loan, any lender is going to make sure that your business is properly covered and that you have a full liability contractor’s insurance policy in place. Having this type of insurance coverage in place will be a requirement as long as the loan is outstanding. The lender will likely also be listed as an additional loss payee on the insurance policy.
When Hiring Employees
If you are looking to grow your business and would like to have employees, you may also need to have a workers compensation policy in place as well on top of your contractor’s insurance policy. Workers compensation will provide you and your employees with insurance coverage in the event they are injured while they are working on the job. The requirement for having workers compensation coverage varies from one state to the next, but it is typically beneficial for all organizations to have even if you are not required to carry it.