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Independent Contractor Insurance: Best Companies, What Coverage You Need
Business insurance can help protect 1099 contract workers from liability and other risks.
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
⏰ Estimated read time: 8 minutes
Independent contractor insurance protects 1099 workers against the risks that come with operating a business. It can include several types of small-business insurance, including general liability insurance, errors and omissions insurance and more.
Most independent contractors should consider buying general liability insurance. 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.
You may also need general liability insurance to comply with your clients’ contractual requirements.
Beyond that, what insurance you should get depends on the type of contract work you do. For example, a self-employed accountant should have errors and omissions insurance in case they make a mistake that costs their customer money. A musician who uses their own instruments and sound equipment may need commercial property insurance that will pay out if their inventory is stolen, damaged or destroyed.
General liability insurance for independent contractors
General liability insurance protects you if you’re accused of causing harm to a third party or their property. It can also protect you against claims of libel, slander and reputational harm.
If you clean homes and are accused of damaging someone’s furniture, for example, general liability insurance could help cover your legal costs.
In some cases, the company that hires you as a contractor may be able to add you to its general liability insurance policy. In others, the company may require you to carry your own policy and ask to see a certificate of insurance before hiring you.
This coverage is also known as errors and omissions insurance, and it protects you if a client or customer accuses you of making a mistake. If you’re a graphic designer, real estate agent or any other type of contractor who provides services, clients could sue you for inadequate performance.
This includes claims of:
Mistakes or oversights in performing your service.
Breach of contract.
Failure to deliver a service on time.
Best insurance companies for independent contractors
If you’re shopping for independent contractor insurance, several commercial insurance brokerages allow you to get a quote and make a purchase online.
Next Insurance: Best overall business insurance for independent contractors
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: Best for temporary coverage
Thimble sells business 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.
USAA: Best for military members and families
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.
State Farm: Best for working with an insurance agent
If your insurance needs are complex or you want hands-on support from an agent, consider calling your local State Farm office. The brokerage offers insurance packages for a variety of industries, and it allows customers to add professional liability coverage to a business owner’s policy. Read NerdWallet’s review of State Farm business insurance.
What other kinds of insurance do independent contractors need?
Depending on what kind of work you do, you may need additional types of business insurance beyond general and professional liability insurance.
Independent contractors who rely heavily on particular materials or pieces of equipment to do their work, such as musicians, photographers or videographers. Also, if you rent office or retail space, your lease may require it.
Commercial auto insurance covers your personal vehicle in the course of doing business, not just vehicles owned by the business. It can help you cover costs related to crashes, including property damage and medical expenses.
Independent contractors who own a business vehicle or who often use their personal car in the course of doing business, such as construction contractors or delivery drivers.
Independent contractors whose work would be significantly set back by a disaster, such as a pipe bursting and causing water damage to equipment that the business relies on.
Cyber liability insurance covers damage resulting from data breaches or software hacks, including the costs of notifying customers and setting up credit monitoring.
Independent contractors, such as accountants, who handle sensitive information.
You may be able to package several kinds of insurance into a business owner's policy, or BOP. Business owner's policies usually include general liability insurance, commercial property insurance and business interruption insurance.
How to get independent contractor insurance
Follow these steps to shop for 1099 contractor insurance.
Weigh your risks. Think about the industry-specific risks you face. What types of lawsuits, accidents or disasters might impact you?
Decide what coverage you need. Your insurance coverage should protect you from the risks you identified above.
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.
Decide how to shop. If your insurance needs are complex, you may want the dedicated support of an insurance broker. If not, try getting business insurance quotes from several different providers, either by working with providers directly or by using an insurance marketplace.
Compare providers. Get insurance quotes from multiple providers before choosing one. Compare premium costs as well as policy limits, coverage details and provider reviews.
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.
Frequently Asked Questions
In general, 1099 workers should have general liability insurance. This kind of coverage protects you if you’re accused of damaging someone’s property or causing them injury. You may also need professional liability insurance, also called errors and omissions insurance, which protects you if you’re accused of making a mistake in your work.
Independent contractor insurance may include general liability insurance, E&O insurance, commercial property insurance, commercial auto insurance and other types of coverage. Which policies you need can vary depending on the type of work you do.
General liability insurance can help protect your business finances if you face a lawsuit. Specifically, these policies can cover you if you’re sued for causing injury or property damage or harming someone’s reputation.
Your clients may require you to have general liability insurance before they’ll work with you.
You can buy general liability insurance online in minutes from insurance companies like Next, Chubb and Thimble. You can also work with an insurance agent if you want hands-on support.
Business insurance ratings methodology
NerdWallet’s business insurance ratings reward companies that offer small-business owners reliability and ease of use. Ratings are based on weighted averages of scores in several categories, including financial strength, customer complaint data, shopping experience and customer service. Learn more about how we rate small-business insurance companies.
These ratings are a guide, but insurance policy details and prices can vary widely from business to business and provider to provider. We encourage you to shop around and compare several insurance quotes.
NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2021.
To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period.
Our star ratings consider ratios for both general liability insurance and commercial property insurance. When an insurer sells policies that are underwritten by several different insurance companies, we consider the NAIC complaint ratios of all the underwriters.