Independent Contractors Insurance

Published: | Updated: January 12, 2018

Definition - What does Independent Contractors Insurance mean?

Independent contractors insurance is a policy for people who work for a person or an entity but cannot be classified as one of their employees. Purchasing this type of insurance is sometimes a requirement for hiring a third party, since it absolves the hiring party of future liability and passes it on to that third party instead.

Insuranceopedia explains Independent Contractors Insurance

It can be difficult to tell the difference between an independent contractor and an employee. But where insurance is concerned, it might be easier to tell them apart because the independent contractor is not entitled to worker's compensation, which is almost every employee's right or privilege.

So, in the absence of worker's compensation, the independent contractor needs to get insurance and it might be mandated by law before their work starts.

They might also need a liability insurance policy so that legal expenses are going to be covered should there be a legal complaint regarding the work they have rendered.


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