Does Your GL Policy Cover 1099 Contractors?

Understanding Liability Risks with Independent Contractors

Working with independent contractors can provide numerous benefits, but it also involves potential liability risks. Many business owners frequently believe that their General Liability (GL) policy sufficiently protects them in these scenarios—unfortunately, the reality is more nuanced. When contractors lack their own coverage, businesses might face exposure to claims that they assumed were covered.

Your GL Policy Covers Your Business

Let's clarify: Independent contractors are not employees of your business, yet their actions can significantly affect your operations. While your GL policy may offer some protection by covering lawsuits involving contractors’ work, be aware that independent contractors are not automatically covered under your business's policy. This means that if something goes wrong, you might be left footing the bill unless precautions are taken.

Insurance Solutions to Reduce Your Risk

Why Proper Insurance Coverage is Critical

Ensuring proper insurance coverage when hiring independent contractors is crucial. Overlooking this dimension can leave you liable for claims that should otherwise be the responsibility of the contractor. We recommend conducting a risk assessment of your current contractor policies and making adjustments to protect your business better.