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What Type Of Insurance Does An Independent Contractor In Manitoba Need?

Two contractors on a construction site looking over building plans
March 14, 2023


If you’re an independent contractor or recently became one, you’re probably wondering what type of insurance an independent contractor in Manitoba needs.

If you work with tools or equipment in a field such as construction, roofing, or plumbing, you MUST at least have independent contractor liability insurance. If you work as an independent contractor in another, less hands-on field, you may not have the same obligations. However, we still recommend protecting yourself with coverage such as professional liability insurance.

In this blog, we’ll break down what insurance you need as an independent contractor, what coverage isn’t required but strongly recommended, and how they can help you and your business better plan and succeed for years to come.

Prefer to skip the reading and jump right to getting a quote? Go ahead and submit a quote request! We’ll discuss your options and help you find the right coverage for your business at the best price.

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Do You Need Insurance As An Independent Contractor?

As we mentioned, if you work in a hands-on field where you’re exposed to risks every day, you most likely– at minimum– need independent contractor liability insurance. This type of coverage protects your business in case an accident or incident occurs and you are found liable.

And, even though other types of insurance may not be technically required, such as professional liability or disability insurance– we still strongly recommend getting them as they can save you thousands, if not millions, down the road. Not to mention, it helps give you the peace of mind you deserve.

What Is An Independent Contractor?

An Independent contractor refers to a self-employed individual who provides work for another person or organization under contract but is not classified as an employee.

Independent contractors typically have specialized skills or knowledge that are required to do the outlined job. They also provide their own tools and equipment.

This article focuses on contractors in hands-on fields, such as construction, roofing, electrician, plumbing, etc. However, If you have questions about your specific field of business regardless of what it is, get in touch! We are here to help you navigate the world of business insurance, as nothing is worse than being caught without the proper protection in place!

What Are Some Scenarios Where You’d Want Insurance?

As an independent contractor, ensuring you have the proper protection in place is not only important but also required.

There are many scenarios where having the right coverage would not only help you keep your hard-earned money in your bank, where it belongs– but make sure a claim brought on by a slip and fall or accidental damage doesn’t end up costing you your business.

Scenario 1

Did you know: As an independent contractor, you can be held legally responsible for damages such as bodily injury inflicted on a third-party individual (e.g. customers or clients) that is due to, or happens on, your work site?

Scenario: A homeowner hires a contractor to renovate his kitchen. The owner tours the construction area during the project, and a ladder falls, knocking him to the ground. The homeowner’s arm is broken, and he sues the contractor. Fortunately, the contractor can cover the cost of any medical costs and legal fees through his insurance.

Scenario 2

Did you know: Things that are out of your control (such as accidents, theft, and property damage) could not only cause you to bear sudden expenses but could also create significant setbacks in your project timeline (AKA big financial losses).

Scenario: During a construction project, a contractor leaves their tools at the job site over the weekend. When they return the next week, they discover that nearly $5,000 worth of their tools and equipment have been stolen. Since they had an insurance policy, these expenses are covered, and their business operations can continue uninterrupted.

Scenario 3

Did you know: A mistake that takes a second to make could end up costing you big time without the right coverage in place?

Scenario: A plumber completes maintenance work on a washing machine. They accidentally forget to ensure they’ve secured all lines before leaving the job. The next time the client runs their machine, it floods her laundry room. The client sues the plumber, but luckily they can cover the cost of the damages through their trades and contractors’ insurance.

What Type Of Insurance Do You Need As An Independent Contractor?

So, you now know that as an independent contractor, you need to have Independent contractor liability insurance in place. Not only is it required, but it’s there to help you reduce your risks as a business owner and protect you from expenses that could end up costing you your business.

The best way to take full advantage of your insurance is by getting it and understanding what it is and why it’s an essential part of your business protection plan.

Commercial General Liability Insurance For Independent Contractors

What it is: Commercial General Liability (CGL) insurance is designed to protect you and your business from a loss if you’re found legally liable. This can include bodily injuries or property damage to a third party caused by the product you sell or the service you provide. CGL insurance can also offer protection when you or your staff are conducting business offsite.

Why you need it: CGL is not only important to have as it would cover your legal expenses in the event your business is liable for an injury or damage, but it is also required to have.

We also recommend requesting to add business interruption coverage to your CGL policy.

While commercial property insurance pays for actual physical damages or losses, Business Interruption coverage covers lost net income due to the closure of the business while repairs are underway. These policies may cover rent or lease payments, relocation costs, employee wages, taxes, and loan payments.

Disability Insurance For Independent Contractors

What it is: Disability insurance protects you, the insured, from losing your income if you are unable to work due to illness or injury. It provides a monthly income replacement (up to a certain percentage of your normal income) so that you can focus on getting better instead of worrying about your finances while you are unable to work.

Why you need it: Although having a disability insurance policy is important for everyone, it becomes particularly important if you work in a higher-risk job. And, as a contractor, you rely on working to provide your income. So, if you cannot work for some time, it could severely impact your finances and lifestyle.

Professional Liability Insurance For Independent Contractors

What it is: Professional Liability Insurance– also known as errors and omissions insurance– helps protect your business if a client holds you responsible for errors in your work. If your client suffers a loss due to errors in your work or feels that you failed to meet their expectations, they could sue you.

Why you need it: As an independent contractor, you are open to the risks of getting sued for negligence and errors just by offering services. And if that ever happens, you’ll want to ensure you have the right insurance coverage to help protect yourself.

Health Insurance For Independent Contractors

What it is: Having an individual health policy allows you, the insured, to offset some of the costs that are associated with medical necessities (for example, physiotherapy and ambulance coverage) as well as dental needs (for example, routine teeth cleanings and oral surgery) over and above what you would receive from your primary provincial health care. Which, when it comes to non-emergency coverage, isn’t much.

Why you need it: Healthcare can be costly, so having access to an insurance policy that will assist in paying some of the associated costs can be extremely helpful! This is especially true when you work in a field where having your body feeling its best is vital to your business.

Related: How To Choose & Get Health Insurance For Your Manitoba Small Business

Commercial Auto Insurance For Independent Contractors

What it is: Commercial auto insurance offers protection for vehicles used for work/ business purposes. Whether you have a specific commercial vehicle or use your personal vehicle for work, if it’s used for business (beyond driving to and from work), it needs commercial coverage.

Why you need it: If you only carried a personal auto insurance policy and were to get into an accident with a vehicle that was being used for business purposes (even if not at the time of the accident), there is a likely chance that the claim would not be processed.

So if you think you need to up your auto insurance game, get in touch. We are happy to discuss your situation and determine if the current protection on your vehicle is enough to cover you.

Related: When Do You Need Business Car Insurance In Manitoba?

How To Get Insurance As An Independent Contractor

The best option to get coverage as an independent contractor would be to speak to a licensed business insurance specialist and discuss/outline all your business needs. They’ll be able to help you get a policy tailored to your business and your risks so that there are no gaps in coverage.

This can usually be done with either a single policy or a combination of two. Working with a licensed business insurance company that is also an insurance advisor (like us!) will help you lock in the lowest rates and get you the unique coverage to suit your specific needs.

Let’s Get You Covered!

As an independent contractor who works in a hands-on field where you’re exposed to risks every day, you MUST, at minimum, have Independent contractor liability insurance.

This type of coverage helps protect your business if an accident or incident were to occur and you were found liable. Plus, we recommend adding on a few additional insurance policies like disability, health, and professional liability insurance coverage, as they will help make sure you and your business are covered from every angle.

When picking out the best policy for your business, we always recommend working with a licensed business insurance advisor. They will not only be able to help you pick out a policy that is tailored to your unique needs but also help you lock in the best rate.

So if you’re ready to protect your business– start by getting a commitment-free quote. We’ll help you figure out a plan that offers you the protection you need and help you find one that works within your budget.