Subcontractor or Sole Proprietor? Insurance Options That Fit Your Business Size

Running a business as a sole proprietor or working as a subcontractor can offer flexibility and independence, but it also comes with unique risks. Choosing contractors insurance that fits your business’s size and scope can help protect your livelihood without overextending your budget. At Ferrell & Hill Insurance Agency LLC, we can help you navigate these topics and make sure you’re adequately insured.

Why Might Business Insurance Differ for Sole Proprietors and Subcontractors?

Insurance needs can vary significantly depending on your business structure and role. Because these situations typically involve smaller operations, insurance policies may be more customizable and affordable, but also more limited in scope. Formal mandates regarding coverage may also vary for sole proprietors and subcontractors, so consulting with a qualified insurance professional is advisable.

Can I Be Covered By Others’ Policies?

In some cases, yes, but it’s not guaranteed. For example, general contractors or clients may be responsible for confirming that subcontractors have suitable workers’ compensation insurance or may be responsible for covering you while working on their project. Alternatively, contracts may require you to carry your own policies. In many cases, relying on other parties’ coverage may expose you to unforeseen risks, meaning having your own insurance is often advisable.

What Types of Insurance Should I Make Sure I Have?

Depending on your location, industry, and services, you may want to consider investing in the following types of insurance:

• General liability insurance can financially protect against claims of third-party bodily injury, property damage or personal injury.
• Commercial property insurance can help pay for repair or replacement costs if your building, tools, equipment, inventory and other physical assets are damaged or stolen.
• Business interruption insurance can compensate you for lost income and continuing costs if a covered incident causes delays.
• Business owners policy insurance can bundle general liability, commercial property and business interruption coverage under a single, cost-effective policy, and is typically available for small businesses, such as sole proprietors and subcontractors.
• Professional liability insurance may cover losses and expenses if a client alleges you committed errors or negligence in your work.
• Workers’ compensation insurance can provide financial assistance if you or your employees are injured on the job or develop a work-related illness.
• Commercial auto insurance is typically required by law and may offset losses related to business use of vehicles. Even if you’re using a personal vehicle, doing so for business purposes typically means you’ll need this type of policy.

We’re Here to Help

If you’re a sole proprietor or subcontractor in or around Madison, WV, contact Ferrell & Hill Insurance Agency LLC to discuss your unique coverage needs and craft policies capable of addressing them.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.