The Truth about Business Insurance for Contractors

Many vendors require that you carry insurance. It is not a client requirement it is theres. Alot of the insurance is expense. Here is a list of common insurance.

1. General Liability: Basically if you drop kick a monitor you are covered. Its about $600/year for $1 million.
2. Car Insurance: Yes many companies require that you carry this. It's stupid. It's just standard contract BS and they don't want to tailor it. They usually want a $1 million policy. Just in case you accidently drive into the building and kill a few people. I believe this is about $200.
3. Errors and Omissions(E&O). This covers you making a coding mistake. It's very expense. Up to $4000 per $5 million in coverage. Some companies want $20 million in coverage.

The car insurance often requires that you pay $150 up front. However, the rest does not. Here is what you do. Call an insurance company. Get the required insurance. They will send you confirmation by email. Send that info to your vendor. Cancel the insurance without paying.

They never check. If you are concerned hold on to it for a couple of weeks and then cancel without paying. If they question it later do it again. If you do a good job onsite and the client loves you they won't "fire" you. You have power if you do a very good job for the client.

The car insurance is idiotic. General Liability is silly. I mean seriously are you going to lose your laptop? What are the odds? If you do, how often will you do it? Once? Business laptops are not expensive. Just pay for it.

Now E&O is a risk. I have never met anyone sued for making a coding mistake. Ever. However, if they do you are screwed. I risk it. I am not paying this much money.