Becoming An Independent Contractor? 5 Reasons Your Insurance Needs Change

Are you going to work for yourself as an independent contractor? Among the many things you will need to do start offering independent services, you will need to assess your insurance needs. While you may offer the same type of services that you did as an employee, your insurance needs may bow be very different. Why? Here are five key reasons. 

1. Employer-Based Policies End. When you work for an employer, they provide a number of insurance protections you may or may not realize. For instance, they pay for workers' compensation, liability protection for your duties, and property insurance in case of disaster. You may have also purchased subsidized health, life, or accident insurance through your employer. You will now need to cover these insurance needs yourself. 

2. Insurance May Be Mandatory. Some insurance coverages are mandated by the government or association rules. For instance, any company vehicle is usually required to have at least liability insurance protection. And depending on how you yourself are classified — such as an owner of an S corporation classified as an officer as well — state or federal rules may obligate you to have workers' compensation coverage. 

3. Your Risk Is Higher. Insurance premiums are due each month, but they mitigate the additional risk you take on as an independent serviceperson. If workers' compensation coverage isn't applicable to your situation, an injury could leave you destitute. You could, though, mitigate the added risk by purchasing business income insurance, an individual health insurance policy, and comprehensive business auto coverage. 

4. Companies May Require It. If you will provide contract services, you may find that the clients or general contractors require minimum insurance policies. They are most likely to require workers' compensation coverage if it's applicable to your status, general liability insurance, or property insurance (depending on where the work is performed). If you fail to maintain minimal coverage, you may not get the more lucrative gigs. 

5. Personal Insurance May Not Help. What if you're a home-based contractor who already has insurance for their personal vehicle, their home, or some liability? Unfortunately, personal insurance policies generally don't cover business activities. While some overlap may be allowed, such as personal tools under homeowners insurance, most items used in the business will be specifically excluded in personal policies.

Clearly, your insurance needs become more complex once you decide to work for yourself. And your existing policies may or may not provide what you need. Your best move is to reassess all your business and personal insurance needs with an experienced agent. Make an appointment today to learn how you can find the financial and physical protection you need to be a successful independent contractor. 

About Me

Finding A Better Insurance Plan

When I found out that my wife was pregnant, I was just as nervous as I was excited. I realized that our health insurance wouldn't cover the entire bill, but I had no idea how bad it would really be. After the baby came, we were slapped with steep, overwhelming medical bills and it was really frustrating. After having that experience, I decided to shop around for another insurance plan that would cover us better. Check out this website to learn more about insurance in general, so that you aren't left wondering what to do with your family health insurance plans.

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