What insurance does a 1099 independent contractor need?
General liability is the one almost every client asks for. The rest depend on your work: professional liability if a mistake in your advice or deliverable could cost a client money, workers' comp if you hire anyone, and auto or tools cover if you drive and carry gear.
| Policy | You need it if | What it pays for | Typical cost |
|---|---|---|---|
| General liability | A client or job site asks for a certificate, or you work at clients' premises | Injury or property damage you cause to others, and your defense | $45/month (Insureon median) |
| Professional liability (E&O) | You consult, design, write code, advise or manage projects | A client's financial loss from your mistake, missed deadline or bad advice | $88/month (Insureon median) |
| Workers' comp | You hire helpers, or your state or trade requires cover for you | Medical bills and lost wages for work injuries | $54/month (Insureon median) |
| Commercial auto | You drive to jobs, haul equipment, or a contract requires auto liability | Accidents in a vehicle used for work | Ask for a quote |
| Tools and equipment (inland marine) | You carry tools or equipment between jobs | Theft of or damage to your gear away from your base | $42/month for Insureon's general contractors |
| Cyber liability | You handle client data or log in to client systems | Data breach costs and related claims | Ask for a quote |
Cost figures are Insureon's medians for all of its small-business customers (general liability, professional liability, workers' comp), not figures for solo contractors only; the tools figure is from Insureon's general contractor cost page. Insureon calls them averages; its method note says medians. Trade-by-trade numbers are further down.
If you have an office or shop of your own, a business owner's policy bundles general liability with property cover.
Your client asked for a certificate of insurance: what the clause means
A client's insurance clause tells you which policies to buy, the minimum limits, and which endorsements to add. Send the clause to your insurer or broker before you sign, because a certificate alone often isn't enough.
Here's a real example. California's Department of General Services publishes sample insurance provisions that state agencies might use in contracts. DGS says actual requirements depend on the scope of work and the solicitation controls, so treat this as one example, not a standard:
| What the sample clause asks for | What it means for you |
|---|---|
| General liability "on an occurrence form" | The policy covers incidents that happen while it's active, even if the claim comes later. Check the form type on your quote. |
| $1,000,000 per occurrence and $2,000,000 aggregate | Your policy must pay at least $1 million for any one incident and $2 million in total for the policy year. |
| Name the state "as additional insured, but only with respect to work performed under the contract" | You add an additional insured endorsement so the client is covered under your policy for claims arising from your work for them. |
| Auto liability of $1,000,000 combined single limit, including owned, hired and non-owned vehicles | One $1 million limit for injury and damage per accident, covering your own vehicles and ones you rent or borrow for the job. |
| Statutory workers' comp and $1,000,000 employer's liability "for all its employees" | Only applies if you have employees. If you do, your workers' comp must meet state law and carry $1 million of employer's liability. |
| A waiver of subrogation endorsement attached to the certificate | Your workers' comp insurer gives up its right to recover from the client after paying a claim. It's an endorsement your insurer must add. |
| Professional liability, cyber and others as the contract requires | Extra policies depend on the scope of work. |
| "A statement on the certificate of endorsements is not acceptable in lieu of the actual endorsement" | Your client wants the endorsement documents themselves, not a line typed on the certificate. |
A certificate of insurance is the one-page summary your insurer issues; the endorsements are the policy changes that actually give the client rights. Ask for both, and check that every limit on the certificate matches the contract.
Need coverage before the job starts? Compare business insurance quotes for general liability and the endorsements your client asked for.
How much does independent contractor insurance cost?
Insureon's small-business customers pay a median of $45 a month for general liability, $88 for professional liability and $54 for workers' comp. Your trade matters more than your 1099 status: Insureon's carpenters pay nearly three times what its consultants pay for general liability.
These are Insureon's figures for its own customers in each trade (read 10 October 2026). They're per policy and include businesses with a few employees, so a solo contractor may pay less for workers' comp, or not need it.
| Trade | General liability | Professional liability (E&O) | Workers' comp |
|---|---|---|---|
| Carpenters | $94 | $67 | $201 |
| Painters | $72 | $67 | $190 |
| Electricians | $61 | – | $140 |
| Handyman | $81 | – | $108 |
| House cleaners | $51 | – | – |
| Consultants | $32 | $62 | – |
| IT consultants | $31 | $75 (tech E&O) | – |
| Software and web developers | $32 | $111 (tech E&O) | $41 |
| Marketing and creative freelancers | $33 | $78 (media liability) | – |
| Photographers | $29 | $42 | – |
| Personal trainers | $29 | – | $55 |
| Massage therapists | $30 | $42 | $50 |
| Real estate agents | – | $59 (E&O) | – |
Monthly figures. A dash means Insureon doesn't publish that figure for the trade. Sources: Insureon's cost page for each trade; our guides cite the same pages.
Do independent contractors need workers' comp?
For yourself, usually not, if you have no employees: in the states we checked, a sole proprietor working alone can choose. The big exceptions are construction in some states, California roofers, and any contractor who hires help. Clients can still require it in the contract.
States where we confirmed that a solo contractor with no employees can choose whether to cover themselves: New York, New Jersey, Georgia and Florida outside construction. In Texas, workers' comp is elective for every private employer.
Whether you're really an independent contractor for workers' comp is a separate, stricter question than your tax status, and the states that matter most for 1099 workers answer it differently. Checked October 2026 against each statute or state agency:
| State | How the state decides | What it means for a 1099 contractor | Source |
|---|---|---|---|
| New York | Most people providing services to a for-profit business are employees; a contractor counts as a separate business only if it meets all 12 listed criteria. In construction and commercial goods transportation, workers are presumed employees unless they pass the statutory test. | A New York CE-200 exemption certificate proves exemption only to a government agency issuing a license, permit or contract, not to a private client or its insurer. | NY WCB, CE-200, Labor Law §861-c |
| Florida | In construction, independent contractors and sole proprietors count as employees. Outside construction, a contractor is excluded only if it meets at least four statutory criteria. | A construction sole proprietor needs coverage, not an exemption: exemptions exist only for corporate officers (up to 3 per company, each owning at least 10%) and LLC members. | Fla. Stat. §440.02 |
| California | For workers' comp, anyone who is an employee under the ABC test (Labor Code §2775) is an employee, from 1 July 2020. Doing work that needs a contractor's license creates a presumption of employment, and without a valid license you can't be an independent contractor. | Roofers must carry workers' comp even with no employees, and every CSLB licensee loses the no-employee exemption on 1 January 2028. | Lab. Code §3351, §2750.5, CSLB bulletin |
| Texas | Workers' comp is elective. In construction, a covered general contractor is the employer of a subcontractor with no employees, and written agreements (DWC-081, 083, 084, 085) set who covers whom. | Read any agreement your general contractor asks you to sign; it decides whether you're under their policy. | Tex. Lab. Code ch. 406, TDI forms |
| New Jersey | For workers' comp, you're an employee if you meet either the "control" test or the "relative nature of the work" test. New Jersey's new ABC rules (in force 1 October 2026) cover unemployment and wage laws, not the workers' comp act. | Doing the same core work as the business that hires you can make you its employee for workers' comp. | NJ WC-373, NJ DOL |
| Pennsylvania | In construction, you're a contractor only with a written contract, freedom from control, and an independently established business; the business test includes carrying at least $50,000 of liability insurance. | A construction contractor without a written contract and liability cover risks being treated as the hiring firm's employee. | PA Act 72 |
| Illinois | Construction workers are presumed employees unless they pass a 3-part test or a 12-criteria test for sole proprietors. | A business that hires an uninsured contractor can be liable to that contractor's employees for work on its premises. | 820 ILCS 185/10, 820 ILCS 305/1 |
| Massachusetts | The hiring business's workers' comp insurer pays an uninsured contractor's injured employees, then can recover from the contractor. | If you have employees and no workers' comp, your client's insurer can come after you. | M.G.L. c.152 §18 |
Working in another state? Check our workers' comp requirements by state and the state's workers' comp agency. If you want cover for your own injuries, see workers' comp for the self-employed.
If you hire 1099 contractors: what your business needs
Get a certificate of insurance from every contractor before they start, and check it covers workers' comp if they have employees. An uninsured contractor's injuries can land on your policy.
Florida makes a contractor who sublets work liable for the subcontractor's employees unless the sub has its own coverage, and requires contractors to collect proof of it. Illinois and Massachusetts put similar liability on the hiring business (see the table above). New York's Workers' Compensation Board says insurers routinely charge general contractors premium for subcontractors without coverage, and that misclassifying employees to save premium is caught at audit and charged retroactively. Our workers' comp guide explains how that audit works, and is workers' comp required covers when your own business crosses the line.
Am I really an independent contractor?
Your contract's label doesn't decide it; the facts of the work do, and the IRS, the Department of Labor and each state use different tests. If you're reclassified as an employee, the hiring business's workers' comp covers you and its insurer charges for you.
- IRS: the IRS weighs three kinds of evidence: behavioral control, financial control, and the type of relationship. Payers generally don't withhold tax for independent contractors.
- Form 1099-NEC: the reporting threshold rose to $2,000 for payments in tax years beginning after 2025, and may be adjusted for inflation from 2027. Clients that paid you less than that may not send a 1099-NEC.
- Department of Labor: the 2024 federal rule is still on the books, but DOL stopped applying it in its own enforcement in May 2025 (Field Assistance Bulletin 2025-1). It proposed a replacement on 27 February 2026; comments closed 28 April 2026, and no final rule had been published as of 10 October 2026.
- California ABC test: you're a contractor only if you're free from the hiring business's control, do work outside its usual course of business, and have an independently established trade.
Does forming an LLC change what insurance I need?
Not much. Clients ask for the same general liability and certificates whether you're a sole proprietor or an LLC. The structure matters for workers' comp.
New York doesn't require workers' comp for an LLC with no employees, just as it doesn't for a sole proprietor. In Florida construction, the only way to be exempt from coverage is as a corporate officer or LLC member, so a sole proprietor there must carry it. Illinois lets LLC members elect out of coverage. More detail in does an LLC need insurance.
Insurance guides for contractors by trade
Most 1099 workers are really a trade or a profession with one client at a time. These guides cover the policies and costs for specific work:
- Trades: handyman insurance, general contractor insurance, construction subcontractor insurance, pressure washing insurance, carpet cleaning insurance
- Professional and creative: IT consultant insurance, marketing agency insurance, photographer insurance, professional liability for consultants
- Wellness: personal trainer insurance, massage therapist insurance
Frequently asked questions
What insurance does an independent contractor need?
General liability first, because it's what clients ask to see on a certificate of insurance. Add professional liability (E&O) if you give advice, design or code, commercial auto if you drive for work, tools cover if you carry equipment, and workers' comp if you hire help or your state or trade requires it.
How much does independent contractor insurance cost?
Insureon's small-business customers pay a median of $45 a month for general liability, $88 for professional liability and $54 for workers' comp. By trade, Insureon's consultants pay $32 a month for general liability and its carpenters $94.
Do independent contractors need workers' comp for themselves?
In the states we checked, usually not if you have no employees: New York, New Jersey, Georgia and Florida (outside construction) let a solo contractor choose, and Texas makes it elective for everyone. Florida construction contractors, California roofers and, from 2028, all California licensed contractors must carry it. A client contract can also require it.
What happens if a 1099 contractor gets hurt on my job?
If the contractor has their own workers' comp, it pays. If they don't, your state may treat them as your employee or make you liable for their workers, as Florida, Illinois and Massachusetts do, and your insurer can charge you premium for them at audit.
Does my personal auto insurance cover driving for work?
Ask your insurer whether your personal policy covers business use before you rely on it. Contracts can set their own auto requirements: California's sample state clause, for example, asks for $1 million of auto liability covering owned, hired and non-owned vehicles. Our commercial auto guide explains the options.
What is a waiver of subrogation?
An endorsement where your insurer gives up its right to recover from your client after paying a claim. California's sample state contract clause requires one on workers' comp. Your insurer has to add it to the policy; that sample says a statement on the certificate isn't acceptable in place of the endorsement.
Next step: compare quotes
Ready to get covered? Compare business insurance quotes, or read our guides to general liability and professional liability.