If you own a home, homeowner’s insurance protects you from catastrophic events like fires and unexpected accidents like a neighbor getting hurt on your sidewalk. Just as a homeowner needs protection against losses related to their house, it’s essential for independent contractors and other business owners to protect themselves from the unexpected.
Independent contractors need to consider getting their own general liability insurance, and perhaps additional coverage specific to their industry. We reviewed more than three dozen insurance companies based on coverage options, price, customer service, and more to help independent contractors find the best coverage for them.
Best Independent Contractor Insurance Providers of 2020
Best Overall: Hiscox
Hiscox is our top pick for independent contractors thanks to the ability to quickly get approved for a policy online at a competitive price. It earns a nearly five-star average based on reviews from around 3,000 customers. Hiscox also holds an A rating from AM Best. While it isn’t one of the biggest names in insurance in the United States, it has over a century of history in the United Kingdom. Hiscox is officially registered in Bermuda.
Hiscox is great for people who work online and makes it easy to get a quote online without going through an outside agent. We ran a quick quote for a website development company and were given an estimated price of $350 for general liability insurance. The policy includes $1 million in per-occurrence coverage ($2 million aggregate) as well as coverage for libel, slander, and electronic data liability. Custom options include business property and equipment coverage, terrorism coverage, and other features.
A quick quoting process and options for additional coverage that your business may need make Hiscox an easy place to get insurance up and running quickly for many independent contractors.
Runner-Up, Best Overall: Chubb
Chubb earns our runner-up spot thanks to a combination of covering a wide range of business needs and strong customer service ratings. It was the second-largest business insurer in the U.S. for 2018 and ranks considerably above average for customer satisfaction. Chubb is an international insurer based in Switzerland and has a top-level A++ rating from AM Best.
At Chubb, you can find coverage for a large number of industries, ranging from aerospace to wineries, as well as many different coverage types. Chubb offers very specific types of business insurance coverage, including cyber risk, environmental, and medical liability. Whatever types of businesses you work with as clients, you are likely to find coverage through Chubb.
In a test for $1 million occurrence, $2 million aggregate limit coverage for an online media company, we found general liability coverage from Chubb for $485 per year. However, this policy would only work for businesses that exclusively work in the U.S. Keep in mind that general liability insurance typically doesn’t include coverage for property, vehicles used by your business, employee injuries, or professional errors.
Best for Fast-Growing Businesses: Travelers
Travelers is our top choice for fast-growing contractor businesses because it has a very strong reputation, covers a wide range of industries, and holds an impressive A++ rating from AM Best. Its customer service leaves something to be desired, however, as is indicated by its lackluster rating in a 2019 J.D. Power study. According to the Insurance Information Institute, Travelers was the largest issuer of business insurance policies when measured by premiums written.
Travelers offers specific liability insurance policies for contractors with unique features and benefits compared to general liability policies for larger businesses. That includes coverage for working on a client’s job site, errors and omissions, and other coverage for a specific project. This can help you save on costs while getting higher levels of coverage for one-time needs.
Because Travelers offers so many flexible insurance options and covers the needs of so many different businesses, odds are there is a policy or combination of policies that would meet your needs. And, as your business grows, Travelers is almost certain to have an option to keep your business insured.
While Travelers can help you get the right amount of coverage to meet your needs, one downside is that pricing is not available directly online. You have to go through a third-party, independent agent to get a price.
Best for Construction Industry: Nationwide
Nationwide is one of the most recognizable insurance brands in America thanks to its consumer-facing ads on TV, but it’s also a big insurance company for construction businesses. Nationwide was the ninth-largest commercial insurer in the U.S. for 2018 and earned the No. 1 spot for small businesses insurance satisfaction for 2019 in a J.D. Power study. Nationwide holds a sturdy A+ rating from AM Best.
Nationwide is another insurer that offers coverage to a wide range of businesses, but its policies for construction contractors and larger construction businesses earned it a place on this list. Policies can be customized to the needs of your construction business and include some unique and important protections like property in transit insurance, losses from faulty repairs or installs, and other needs unique to construction.
Construction has higher risks of certain types of losses due to the nature of the work. Choosing an insurer that specializes in these unique needs could help you avoid unnecessary risks or overspending on the coverage you don’t really need.
Best for Accounting Industry: The Hartford
The Hartford is the eighth-largest commercial insurer in the U.S. While it earns below-average customer service ratings from J.D. Power, it is a good choice for accounting businesses thanks to custom options for accounting and finance-specific coverage with very reasonable rates.
Accountants handle other people’s money, so they need to be extra careful when it comes to insurance coverage. A mistake on a client’s taxes, for example, could lead to an expensive lawsuit.
The Hartford has options for bookkeepers, CPAs, and other accounting professionals, from solo businesses to larger practices. A Business Owner’s Policy (BOP) from The Hartford includes a trio of general liability, commercial property, and business income insurance.
A quote for an accountant who works at home full-time showed a $500 annual rate for general liability insurance only with $1 million in coverage ($2 million aggregate). Additional add-ons were available during the quoting process that could be useful for many accountants. Adding on a property coverage policy with a $15,000 limit added another $500 per year in cost.
Best for Sharing Economy: Liberty Mutual
Liberty Mutual is the third-biggest business insurer in the United States and earns an average customer satisfaction rating from J.D. Power. Like other large consumer insurers, Liberty Mutual is known best for consumer-facing auto and home insurance, but it also offers a wide range of additional business insurance products including property, umbrella, and workers compensation.
Rideshare drivers and delivery drivers who run their business through sharing economy apps like Uber, Lyft, Grubhub, DoorDash, Postmates, Amazon, and others are wise to cover themselves for liability beyond what they get from their app-based relationship. Non-delivery sharing economy businesses, like those run through Airbnb or Turo, require sufficient coverage as well.
We chose Liberty Mutual as the best option for gig workers because it offers custom business insurance policies just for the sharing economy. You can only get this coverage through an agent or broker, so you can’t buy a policy directly from Liberty Mutual. While a requirement to work with an outside agent is a common insurance feature, it is not a convenient one.
Nonetheless, this is an important type of coverage and you can’t get it everywhere. With Liberty Mutual, you can get coverage for many sharing economy businesses.
Best for Home-Based Businesses: American Family Insurance
American Family Insurance earned the second-highest customer satisfaction rating for small business insurance coverage in a 2019 J.D. Power study. This insurer is well-known for consumer auto, home, and life insurance coverage. It also offers quality policies for businesses, including those that are based at home.
If you work primarily from home, you don’t have to worry about some of the same concerns as independent contractors who work on client sites or their own office location. American Family Insurance has a policy unique to home-based businesses that can cover you in ways that complement your homeowner or renter policy.
Home-based accountants, online workers, artists, florists, and event planners are just a few of the industries that could benefit from this coverage. Depending on your business needs, however, you may want to add additional liability or other commercial insurance, which you can also find from American Family.
We requested an estimate for a business owner’s policy (BOP) for a home-based business and received a quote for $442 per year, which is a very reasonable price for the amount of coverage included. The policy we were pointed to included general liability ($1 million per occurrence, $2 million aggregate limits), rented property coverage of $50,000, business property coverage of $10,000, and a handful of other useful types of coverage.
What Is Independent Contractor Insurance?
Independent contractor insurance isn’t just one type of insurance. Nearly any business policy could be a type of independent contractor insurance. What’s most important is that contractors find an insurance policy or combination of policies that cover them against a variety of unexpected risks and costs. Those include physical injuries, slander, and mistakes delivering your product or service, for example.
The core type of insurance that all businesses should have is general liability insurance. They should also consider other coverage types including business owner policies (BOP) and specialized policies that meet specific needs.
Depending on industry and risks, some businesses should also consider:
- Professional liability: Covers you against errors and omissions (E&O) and accidental mistakes with clients.
- Business property: Covers computers, tools, and equipment owned by your business, as well as other business property.
- Non-owned vehicle: If you rent cars, trucks, or vans for your business, this coverage adds auto insurance when you or your employee are behind the wheel.
- Umbrella: Provides excess liability coverage that protects you against lawsuits and high-liability risks.
- Cyber risk: Covers you against hackers and data loss.
This isn’t an exhaustive list. Every industry and business is a little different. Most insurers on this list offer all needed types of insurance for businesses in the specific categories listed. However, you don’t have to get all insurance from one provider. You can mix and match to meet your company’s needs.
Do Independent Contractors Need to Carry Insurance?
There is no law that says independent contractors are required to have insurance, but it’s definitely a good idea. Many clients could require independent contractors to cover their own $1 million liability policy. But even if they don’t, insurance is still good to have.
Some large companies and public entities also require their contractors to carry a minimum amount of insurance coverage. Some clients may allow you to buy this at the last minute, but others may want to see that you already have high-level coverage in place.
If you make a mistake while working, you could be personally liable if you don’t have good business insurance. That means you could be at risk of losing your savings, your home, or other assets if you find yourself in a legal battle. Insurance puts a big wall between your personal assets and business assets, assuming you run your business correctly.
Does General Liability of Employers Ever Cover Subcontractors?
General liability insurance may cover you against losses caused by your subcontractors. If you use your own contractors to complete any client work, read your policy details closely to ensure your needs are met. In most cases, you will find that your policies don’t cover your own subcontractors. Instead, just as your clients expect you to have adequate insurance, you should require anyone you hire to have their own insurance. Your employees, however, are usually covered by your policy.
What Are the Expected Costs of Independent Contractor Insurance?
Costs for general liability coverage for businesses typically start around $300 to $600 per year. Professional liability policies start around $500 per year and can cost into the thousands of dollars, depending on a company's needs. Most small business owners, however, pay $1,000 or less annually.
The only way to find your exact insurance costs as an independent contractor is to get a quote. Prices vary based on state, business revenues, business property, industry, claims history, and other factors.
How We Chose the Best Independent Contractor Insurance Companies
To create this list of the top independent contractor insurance companies, we reviewed 38 different insurers. Major factors considered included insurance company size, financial stability ratings, customer service, satisfaction ratings, and the ability to customize products to unique needs. We compared information from individual insurers as well as financial ratings companies, customer satisfaction surveyors, and the Insurance Information Institute in order to rank the top independent contractor insurance providers above.
AM Best. "Hiscox Insurance Company Inc." Accessed May 4, 2020.
Insurance Information Institute. "Rankings". Accessed May, 4 2020.
Coverhound. "Compare Small Business Insurance Quotes With Confidence." Accessed May 4, 2020.
Insureon. "What does general liability insurance cover?" Accessed May 4, 2020.
J.D. Power. "2019 U.S. Small Commercial Insurance Study." Accessed May 4, 2020.
Insurance Information Institute. "Rankings." Accessed May, 4 2020.