Workers’ Compensation Insurance covers against the employees for medical costs and disability associated with work-related illnesses and injuries. Many states mandate workers’ comp insurance W2 employees, but some Member States may require that you do not insured contractor in 1099 to cover. So make sure you are with the laws of the state (s), where do you and your customer transactions, and ask your agent or broker for clarification if you need it.
Regardless of the state law is always a good idea of your subcontractors insurance for workers to claim compensation. Why? Because if your contractor is not insured and injuries occur at work, you may be held financially responsible.
Suppose you make a sub-contractor whose employee is suffering from a back injury while ago at a customer site. The company contractor is not insured – but that does not stop looking for the worker to compensation. If he receives no compensation from his own employer, your company is the logical place to turn. And if you pay the premiums to be paid to the contractor, he can not be covered by insurance for your workers comp, you can either pay their medical expenses out of pocket or face a lawsuit.
As for general liability insurance, you may request your contract as independent contractors covered by workers comp insurance. Alternatively, employees of the subcontractor on your own policy, and then the cost of the contractor as part of your contract.
Professional liability and errors
Many customers, you need errors and omissions insurance if you make a mistake on labor costs to bear them money. They want to know that you are able to compensate for financial losses caused by a bug in your company. So, if the person making the mistake is an employee or an independent contractor, you want to be sure you are covered by E & O insurance
When shopping for a professional liability insurance policies, search for terms which your company to protect against claims of subcontractors in connection with work performed on your behalf. But the fact that in many cases, your professional liability insurance only protects your business if you keep your subcontractors and further that the contractor is responsible for their own defense costs. Therefore, it is for all sub-contractors, their own E & O policies, and perform clever – and you can easily request them to do so by including it in the contract and ask for proof of coverage.
Remember – your customer can make a complaint or months or even years to file after you and your contractor has completed work, you should take your professional indemnity insurance remain in force as long as you’re in business. As errors and omissions insurance is issued on a claims-made “, you must both maintain continuous coverage to protect over.