What Insurance Do I Need as a Contractor? Your Complete Coverage Checklist

What insurance do I need as a contractor? Your complete coverage checklist

As a contractor, you know how important it is to have insurance.

Without proper coverage, you could face serious risks and financial losses if something goes wrong on the job.

You could be sued for damaging someone’s property, injuring someone, or making a mistake in your work.

That is why you need to protect yourself and your business with the right insurance.

In this article, I will guide you through the different types of insurance available to contractors and help you choose the best ones for your specific needs.

By the end of this article, you will have a clear understanding of what insurance you need as a contractor and how to get it.

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What insurance do I need as a contractor? If you are a contractor, read this article to the end to get professional advice on your work. (Source: Freepik)

General Liability Insurance

General liability insurance is the most basic and essential type of insurance for every contractor.

It covers you for any claims of property damage, bodily injury, or personal injury that you or your employees cause to third parties while performing your work.

For example, if you accidentally break a window, spill paint on a carpet, or hit someone with a ladder, general liability insurance will pay for the repair costs, medical bills, and legal fees.

General liability insurance is not only important for your protection but also for your clients’ peace of mind.

Many clients will require you to have general liability insurance before they hire you.

It shows that you are a professional and responsible contractor who can handle any potential issues.

However, general liability insurance does not cover everything.

There are some common exclusions and limitations that you should be aware of.

For instance, general liability insurance does not cover:

  • Your property, tools, or equipment.
  • Your injuries or illnesses.
  • Your work or products.
  • Any intentional or fraudulent acts.
  • Any contractual liabilities or warranties.

To cover these gaps, you may need other types of insurance, depending on your situation.

An infographic to illustrate: What insurance do I need as a contractor?
An infographic to illustrate: What insurance do I need as a contractor?

Professional Liability Insurance (E&O)

Professional liability insurance, also known as errors and omissions (E&O) insurance, covers you for any claims of errors, omissions, or negligence in your work.

It protects you from the financial consequences of making a mistake that causes harm or loss to your client or a third party.

For example, if you design a faulty website, install a defective system, or give bad advice, professional liability insurance will cover the damages, legal fees, and settlements.

Professional liability insurance is especially important for contractors who provide professional services, such as consultants, designers, architects, engineers, accountants, lawyers, etc.

These contractors are held to a high standard of care and expertise, and any deviation from that could result in a lawsuit.

Even if you are not at fault, you could still face a claim from a dissatisfied or disgruntled client.

Professional liability insurance is different from general liability insurance in several ways.

First, professional liability insurance covers claims of economic or financial losses, while general liability insurance covers claims of physical or property damage.

Second, professional liability insurance is based on a claims-made policy, which means it only covers claims that are made and reported during the policy period.

General liability insurance, on the other hand, is based on an occurrence policy, which means it covers claims that arise from incidents that occurred during the policy period, regardless of when they are reported.

Additional Insurance Considerations

Besides general liability and professional liability insurance, there are some other types of insurance that you may need or want to consider as a contractor.

These include:

  • Workers’ compensation insurance: This is mandatory for businesses with employees in most states. It covers your employees’ medical expenses and lost wages if they get injured or ill on the job. It also protects you from lawsuits by your employees for work-related injuries or illnesses.
  • Commercial auto insurance: This covers your business vehicles and drivers for any accidents or damages that occur while using them for business purposes. It also covers any third-party liability that arises from your business vehicles.
  • Builders risk insurance: This protects your materials and equipment during construction projects. It covers them from risks such as fire, theft, vandalism, weather, etc. It also covers any losses due to delays or interruptions in the project.
  • Cybersecurity insurance: This covers your data and systems from cyberattacks and data breaches. It covers the costs of restoring your data, notifying your clients, paying ransom, and defending yourself from lawsuits.

Tailor Your Coverage

As you can see, there are many types of insurance available to contractors, but not all of them are suitable or necessary for everyone.

To choose the right insurance for your specific needs, you need to consider several factors, such as:

  • The type of work you do and the risks involved.
  • The size of your business and the number of employees you have.
  • The location of your business and the laws and regulations that apply.
  • The budget and preferences of your clients and yourself.

To help you compare quotes and find the best policy, you can use online resources such as Insureon, CoverWallet, or Next Insurance.

These platforms allow you to customize your coverage, compare prices, and buy insurance online in minutes.


Insurance is a vital part of being a contractor. It protects you from the unexpected and gives you peace of mind.

By following this guide, you can choose the right insurance for your specific needs and avoid any unpleasant surprises.

However, insurance is not a one-size-fits-all solution.

You need to review your coverage regularly and adjust it as your business grows and changes.

You also need to consult with an insurance professional for personalized advice and guidance.

Do not wait until it’s too late.

Get insured today and enjoy the benefits of being a contractor

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