Independent Contractor Insurance: Best Companies, What Coverage You Need

Independent contractor insurance protects 1099 workers against the risks that come with operating a business.

In general, most 1099 workers need one or both of the following:

• General liability insurance: Necessary if you sell products or services to the general public. This coverage can protect your business if it’s sued for causing injury or property damage.

• Professional liability insurance: Necessary if you provide services directly to clients for a fee. This coverage can protect your business if it’s accused of faulty or incomplete work.

Best insurance companies for independent contractors

If you’re shopping for independent contractor insurance, several business insurance companies allow you to get a quote and make a purchase online.

Next Insurance lets you upload some basic information about your business, get a quote and buy insurance online within a few minutes. If you purchase a policy with Next, you’ll get an electronic certificate of insurance that you can share through email or text with anyone who asks to see it. Read NerdWallet’s review of Next insurance.

Thimble sells general liability insurance policies by the month, year or for a single job or event. If you need coverage to comply with the requirements of a contract but don’t want to pay a premium on an ongoing basis, Thimble might be a good option. Read NerdWallet’s review of Thimble insurance.

If you're a member of USAA — open to current members of the military, their spouses and children — consider turning to the organization for general liability insurance and other types of coverage. USAA policyholders can access their certificates of insurance online. And while you currently can't add an additional insured and file a claim online online, a company spokesperson told NerdWallet that USAA is working on adding these features. Read NerdWallet's review of USAA business insurance.

Professional liability insurance policies from Hiscox cover work done all over the world, and retroactive coverage may be available for some customers. That coverage protects your business against claims arising from before you bought your policy. Read NerdWallet’s review of Hiscox business insurance.

What coverage do independent contractors need?

As a 1099 contractor, you can be held liable for harming another person or their property just as any small-business owner can be. General liability insurance can help protect against these risks.

Beyond that, what insurance you should get depends on the type of contract work you do. For example, a self-employed accountant should have professional liability insurance in case they make a mistake that costs their customer money.

» MORE: General liability insurance for construction industry contractors

How to get independent contractor insurance

Follow these steps to shop for 1099 contractor insurance.

• Figure out what coverage you need. Your insurance coverage should protect you from the risks your business faces based on what kinds of lawsuits, accidents or disasters might happen. 

• See if you can add an endorsement to your homeowners policy. If you run a home-based business, you might be able to add an endorsement to your homeowners insurance policy to get some commercial coverage. Read your homeowners insurance policy carefully to see what coverage is available, and talk to your insurance provider if you have questions about whether the coverage is sufficient.

• Get quotes. Get business insurance quotes from multiple companies to compare costs and coverage before choosing a policy. You can usually get a quote in just a few minutes online. 

• Buy your policies. After you choose a policy, make sure you know how to make payments and file claims if necessary.

• Add the person or business that hired you as an additional insured, if necessary. An additional insured endorsement extends your coverage to another party. Most commonly, you’ll be adding your client or your landlord. That way, if you’re sued on the job and the injured party also names your client in the lawsuit, your client won’t have to file an insurance claim of their own.

It’s possible for the person or business that hired you to add you as an additional insured, too. But since that could increase the cost of their coverage, they may insist you buy your own coverage instead.

» MORE: How to get insurance for sole proprietors and the self-employed