Insurance Needs for Subcontractors
As subcontractors lack benefits like sick leave or workers compensation, they need income protection. Income protection replaces 75% of your lost income if you cannot work due to injury or illness.
Types of Insurance for Subcontractors
- Public liability insurance covers you if you injure someone else or damage property while working.
- Personal accident insurance provides a lump sum if you are injured, even outside of work.
- Income protection pays monthly if you are too injured or sick to work.
Components of Income Protection Policy
Every income protection policy has three parts:
- Benefit amount – the monthly income paid while unable to work.
- Benefit period – the maximum time this income is paid.
- Waiting period – the time between being unable to work and the first payment.
Contractor insurance usually does not cover subcontractors. Without liability insurance, subcontractors risk financial loss if an accident occurs on the job.
For a one-person residential carpentry business, public liability insurance starts around $400 per year.
Insurance for Subcontractors in Florida
All subcontractors in Florida must provide workers compensation for employees covering illness, injury, or death on the job. Subcontractors must maintain insurance, including contractual liability, in specified amounts.
Proof of workers’ compensation can be from the policy’s information page or a screen print from the state’s Proof of Coverage database.
Coverage Requirements and Costs
General liability coverage in Florida requires $1,000,000 per occurrence and $2,000,000 aggregate. Commercial auto insurance requires $1,000,000 combined single limit for bodily injury and property damage.
Pricing:
- General liability coverage ranges from $248-$325 per month, up to $3,000+ per year.
- Insuring tools costs $41-$65 per month, or $500+ per year.