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  • Writer's pictureCharlotte Burr

How to Best Protect your Company When Using Independent Contractors

When running a business that involves working with independent contractors, understanding additional insured is important to making sure that your business doesn't incur avoidable costs.

What is additional insured and why is it important?: Additional insured is when a general contractor puts your name or your business name as an additional group that is covered by the general contractors insurance.

Let's say you are paying an independent contractor to do the flooring on a building that you own and plan on selling. During this job a metal beam falls on the contractor and injures his leg to the point that he will not be able to work for 5 weeks. If you did not get the independent contractor to put you or your business as an additional insured then your liability coverage would have to pay for the independent contractor's injuries and lost wages. If you did get the independent contractor to add you or your business as additional insured, then the independent contractor's insurance would be used for the claim.

It is also important to have additional insured with an independent contractor if they make a mistake and cause unforeseen damages. For example, if an independent contractor causes damages to your property and your company has been added as additional insured then your company would be able to file a claim through the independent contractors insurance rather than your own.

AZ Insurance Team always recommends adding additional insured when working with independent contractors as a precaution to unexpected circumstances.

Independent insurance brokerage located in Tempe, AZ. We offer auto insurance, homeowners insurance, life insurance, renters insurance, commercial insurance…

Disclaimer: Coverage will vary on state, insurance company, and type of policy.


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