Independent Contractor Business Insurance
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Certificate of insurance for contractors

A certificate of insurance (COI) is a document that proves you have insurance coverage. Independent contractors may need one to work with certain clients, sign a lease, or take out a loan.

What is a contractor’s certificate of insurance?

A certificate of insurance is the official proof of insurance coverage that you receive from your insurance provider. It’s also known as an ACORD 25 form. Independent contractors use these forms to show clients, landlords, and lenders that they are insured.

A COI includes important information about the certificate holder’s policy, such as:

  • Insurance provider
  • Type of coverage
  • Business name
  • Policy number
  • Per-occurrence and aggregate coverage limits
  • Exclusions
  • Effective date and expiration date

The most common type of insurance for independent contractors is commercial general liability insurance. This policy protects contractors against legal costs when someone blames them for a bodily injury, property damage, defamation, or copyright infringement.

Why do contractors need a certificate of insurance?

Independent contractors in any field may need proof of general liability insurance to qualify for a contract, sign a commercial lease, or work for a client. General contractors may require subcontractors to prove they have insurance before working on a job.

Some clients might ask contractors and subcontractors to carry professional liability insurance, also known as errors and omissions insurance (E&O). It covers the cost of lawsuits related to unsatisfactory work, missed deadlines, and mistakes.

Most states require businesses with one or more employees to have workers’ compensation insurance. Some states require workers’ compensation coverage for sole proprietors in riskier professions in the construction industry, such as roofing.

Whether you're looking to acquire a new contract for a construction project or just need to meet a legal requirement, having your proof of insurance available is crucial.

It not only shows that you have the coverage required by your clients and state law, but being insured can also help attract new clients who may choose to work with you instead of an uninsured competitor.

Need a certificate of insurance? Start by getting quotes from top-rated providers 

What does a certificate of insurance prove?

Governmental authorities, such as your state or local government, will expect you to have the right types of insurance as part of their risk management plan and to make sure you’re following the law.

If a subcontractor on one of your jobs makes a costly mistake on a project, or accidentally hurts someone, your client will want to know that you and the subcontractor will be financially responsible. Insurance shows you can handle a lawsuit, which makes clients more willing to work with you.

The same is true for a commercial lease. If an accident at your business injures a customer, your landlord wants to know they won’t be held responsible for legal costs or medical bills. When you have insurance, it shows your business can handle these costs.

That’s why having proof of insurance is so important. It provides peace of mind to the people you work for or rent from, as well as your own business.

View a sample ACORD certificate of liability insurance form [PDF].

How do I get a certificate of insurance for contractors?

View video transcript.

Hey there! Yeah, up here in the corner. Good news: You've purchased your policy to protect your business! But that's only the beginning...

A licensed expert will email you a Certificate of Insurance the day you buy a policy. I'd do it, but, you know, I'm an animated talking head.

The certificate means peace of mind. And you can access it on the Insureon online customer portal where you can review policy info and all of your insurance documentation.

Need additional assistance? Or want to make changes? Yeah, no problem! Call toll free, or reach out to a dedicated account manager with questions about billing and claims.

We're with you now, and as you grow. Behind the scenes, but there when you need us. Insureon. Protection is peace of mind.

Most Insureon customers can get their certificate of insurance within a couple of hours after applying for quotes. Businesses that are more difficult to insure can usually get their COI within 48 hours.

You can speak with a licensed insurance agent to get advice about the type of insurance you need, which policy limits to choose, or any other questions.

Do subcontractors need a certificate of insurance?

While contractors are typically the ones responsible for meeting the insurance requirements of clients and complying with state laws, subcontractors may need to have certain types of insurance as required by the lead contractor.

Another option would be for the general contractor to have their insurance cover any subcontractors by including them in their coverage as an additional insured. This would give the subcontractor the same insurance coverage as the general contractor.

This coverage could be limited to the duration of a construction project, or for the length of the policy if both the contractor and subcontractor work together on a regular basis.

For example, if an IT consulting firm has a team of subcontractors that it usually relies on, the company might add these contractors as additional insureds for the length of the policy.

It’s worth noting that an additional insured cannot be included in a professional liability policy.

How do I add an additional insured to one of my policies?

To add a subcontractor to one of your insurance policies, simply notify your insurance provider. The insurance company will likely ask for details about your subcontractor, such as their name, address, and other key information.

This will likely increase your insurance premium, but it’s typically less expensive than having subcontractors buy coverage on their own.

The insurance company will then add the additional insured to your certificate of insurance.

How much does contractor business insurance cost?

A small business owner calculating their small business insurance payments

Here are the average costs for top policies sold by Insureon:

General liability insurance: $42 per month
Professional liability: $61 per month
Workers' comp: $45 per month

Our figures are sourced from the median cost of policies purchased by Insureon customers. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.

How are contractor insurance coverage costs determined?

While some insurance companies charge for each copy of a certificate of insurance, with Insureon your COI is free and available online whenever you need it.

The cost of your insurance coverage itself depends on many factors, such as:

  • Company size
  • Amount of coverage needed
  • Industry type
  • Location
  • Claims history
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Get a contractor COI with Insureon

Complete Insureon’s easy online application today to compare insurance quotes from top-rated U.S. carriers. You can also consult with an insurance agent to make sure you get the right coverage. Once you choose a policy, you can begin coverage in less than 24 hours and get your certificate of insurance.

Updated: October 19, 2023

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