Does General Liability Cover Independent Contractors?

When you hire independent contractors, it’s essential to understand how liability works. Many business owners assume their General Liability (GL) policy automatically protects them from contractor-related risks, but that isn’t always the case. If a contractor doesn’t carry their own insurance, any mistakes they make could put your business at risk.

Your GL Policy Covers Your Business—Not The Contractor

Independent contractors aren’t employees, but the work they do can still affect your operations. While your GL policy may respond to certain lawsuits involving a contractor’s work, these contractors are not automatically insured under your policy. That means gaps can arise—especially if the contractor’s actions lead to property damage or bodily injury.

Insurance Solutions to Reduce Your Risk

Ask for Proof of Insurance

Before work begins, request a certificate of insurance (COI) from every contractor. This simple step helps confirm that they have active coverage—and protects you from unknowingly taking on their risks.

Be Named as an Additional Insured

Requiring contractors to add your business as an additional insured gives you extended protection under their GL policy. If a claim occurs because of their work, their policy—not yours—becomes the first line of defense.

Require Contractors to Carry Their Own GL Insurance

Many industries mandate that contractors maintain their own GL coverage. Having their own policy ensures that claims arising from their work fall under their insurance rather than shifting onto your business.

Use a Well‑Drafted Contract to Clarify Responsibilities

A strong contract should outline who is responsible for what—including insurance requirements and liability obligations. Clear language helps prevent disputes and ensures everyone understands their role in managing risk.

Consider an Owner’s and Contractor’s Protective (OCP) Policy

An OCP policy, typically purchased by the contractor but designed to protect your business, provides primary liability coverage for specific projects. It adds another layer of protection when multiple parties are involved.

When contractors lack proper insurance, your business may become responsible for costly claims. Reviewing contractor agreements and verifying coverage can make a significant difference. Now is a great time to evaluate your current processes and make sure you’re protected before the next project begins.