The following is not meant to be legal advice.
Should a company ask an independent contractor to have his/her own insurance while consulting for the company?
It is usually recommended that the independent contractor have his/her own insurance in order to pay for any liability that occurs. Should liability arise, the company would need to go after the individual’s assets if the independent contractor does not have insurance. This would entail filing a lawsuit and could take a while before the company gets any proceeds as opposed to filing an insurance claim for proceeds which could allow the company to be made whole quicker by getting the funds from the insurance.
To obtain workers’ compensation and errors and omissions insurance with a $1 million limit, the independent contractor may need to pay a premium of $2000 to $5000. The independent contractor would need to send current financials to the insurance broker to obtain a more accurate quote.
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