WEDNESDAY, FEBRUARY 13, 2013
What Type of Insurance Does a 1099 Contractor Need?
 1099 contractors need insurance in order to protect their business. In addition to this, certain specific jobs they may wish to bid on have a prerequisite of insurance coverage of different kinds. Some jobs are so rigid about these rules to such an extent that the contractor is not allowed to bid on the projects unless they have the specified coverage. It could be said that the type of coverage a 1099 contractor needs is based on the kind of job he wishes to undertake. Here are some of the most common types of Maryland Contractors insurances that a 1099 contractor might need:
Coverage for Professional Liability
This insurance offers coverage in case some disaster occurs. Equipment breakage and injuries occurring on the job site are some of the examples of incidents covered by this scheme. In many cases, it works for the benefit of both the hiring entity and the 1099 contractor. For instance, if a personal injury occurs to someone during the job because of the 1099 contractor, this insurance will help in paying for the medical expenses.
Disability Insurance
This type of insurance pays a 1099 contractor a pre-determined weekly wage if the contractor is unable to work because of his disability. This kind of insurance requires a waiting period post the accident that caused disability, after which the contractor would start receiving the benefits. The premiums for this kind of insurance is decided based on many factors like the duration of the waiting period, the percentage of risk involved in the chosen field and the percentage of the actual salary that would be paid every week.
Commercial Auto Coverage
This kind of insurance protects both the contractor and the hiring entity in case some accident occurs on the job site or during working hours. For instance, if a landscaper contractor meets with an accident when he is commuting to pick up something that is required for the project, the commercial auto coverage will cover the cost and not the client for whom the contractor is working.
Performance Bond
This kind of bond ensures that the contractor does the work to the clients’ satisfaction. Otherwise, the bond money would be used to pay for repairs or completion of the project. This kind of coverage works for the benefit of the entity and increases the credibility of the contractor. Undesirable procedures like getting sued for incomplete work or seizing personal property for the damages caused could be avoided when a 1099 contractor invests in this kind of bond.
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