You do your due diligence to make sure that your business is covered in case of mistakes or errors. But as discussed in our previous blog, Does an Independent Contractor need a Liability Insurance?, it is essential to confirm that your contractor does carry a liability insurance as well.
When considering to hire a third party, ensure that they are adequately covered by checking and reviewing their Certificate of Liability Insurance, which provides evidence of insurance coverage. Also, craft your contract to require your vendor and/or contractor and their subcontractors, to have liability insurance policies as well.
A contractor with available coverage should have no problem providing you with their Certificate of Liability Insurance. This is key to show their interest in doing business with you and to present their professionalism and care about their clients. You may also contact the insurance company listed on the Certificate of Liability Insurance to confirm some information such as expiration date.
As for your responsibility to extend Workers’ Compensation Insurance coverage for your independent contractors, you first need to be very clear on following the definition for “independent contractor.” Hiring a contractor for a long period of time might not qualify under such definition which means you are required by law to offer them Workers’ Compensation coverage. In California, the law requires employers to have Workers’ Compensation Insurance as soon as they hire their first employee. That being said, click HERE to learn more about California’s requirements for Workers’ Compensation Coverage and contractors.