E&O Insurance for Independent Contractors

Ontario businesses can thrive as long as they take precautions. You always have to look over your shoulder and worry about the problems that you’re going to encounter in the future. This is why it is pertinent to obtain errors and omissions insurance. This type of insurance will provide you with a little more protection. There is a good chance that you’re going to be hiring independent contractors. After all, your business cannot do everything. This creates a dilemma. After all, your Ontario E&O insurance policy is not going to cover your independent contractors, unless endorsed on the policy.

You need to make sure that all independent contractors are covered to the fullest. This will protect you and them from lawsuits stemming from incorrect work or work that has not been completed. Other problems include errors, oversights, not delivering what you promised, and more. These things will be protected by errors and omissions insurance.

Below, you’re going to learn about E&O insurance, your requirements, and the needs of your contractors.

Who Will Be Held Liable?

First and foremost, you should take the time to learn more about professional negligence. Who is going to be liable in the event that you’re both accused of professional negligence? You might be planning a business meeting, birthday, or another type of event. If this is the case, you’re probably going to hire a few workers to help organize the event. Then, you’ll need to hire a handful of independent contractors. For instance, you’ll hire entertainment, caterers, and so much more.

You’ll consult with your clients before moving forward with everything. The big day is right around the corner and you’re worried that something might go wrong. What will happen if one of the entertainers causes a ruckus and ends up hurting someone? You hired the entertainment but they were the one who was directly responsible for the client’s injury. You did your best to screen the entertainment.

In the end, there is a risk that the client is going to file a lawsuit against your business and the entertainment. After all, the entertainer was your contractor at the time. In all likelihood, you’re both going to be held liable. Therefore, you cannot take the risk. You have to protect yourself and your business. This is why you need to make sure that you have E&O insurance. Your independent contractors need it as well.

What E&O Can Do For Your Business

Ultimately, errors and omissions insurance is a must for your business. It is also a necessity for your independent contractors. Once you’ve obtained this type of insurance, you’re going to have protection from a handful of problems. For instance, you’ll have help paying court costs and lawyer fees. You also have to worry about judgments and settlements. You never know what the court is going to do. They might not rule in your favor. Well, E&O or professional liability insurance can help. Just remember that this type of coverage may not extend to your contractors.

Therefore, you need to make sure that they have it!

Additional Insured

Again, your errors and omissions policy may not cover your independent contractors. That can create real problems for everyone involved. You cannot let them help until you are positive that they are covered. The good news is that you can solve this problem by adding them to your policy. To do this, you need to add them to your policy as an additional insured. This is a term that is used to describe someone who is covered by the policy besides the policyholder.

Just remember that the protection they have will be less and it is going only to last for a short period. Once the project has concluded, the insurance will no longer protect the independent contractor.

How It Works

Using an additional insured is a good way to protect your Canadian business. However, you should understand that it is not going to protect the independent contractor to the fullest. For instance, you might have hired a graphics designer to create a logo for a company’s website. Well, you’ve already built the website and it is ready to be launched. The company launches the website without the logo. They figure that they can add it later. Your job is finished. What happens if the graphics designer never delivers the logo?

You added them to your policy as an additional insured. However, this isn’t going to provide them with protection now. Your role in the project has ended so their coverage is gone too. Therefore, it is pertinent for everyone involved in the project to have their own coverage. If you get sued by the client, you would want to sue the independent contractor or the graphics designer. After all, it was their fault.

E&O Insurance Costs

Finally, you should take the time to analyze the potential costs of errors and omissions insurance. Ultimately, there is no universal price for this type of coverage. You’re running a business in Ontario. You will pay less or more than someone operating a business in Toronto. Even if the businesses are in the same industry, the prices can vary. Simultaneously, you should know that the prices can vary based on the industry in question. With so many factors to juggle, it can be difficult to know how much you’re going to be forced to pay.

The best way to get a definite answer is by working with ProfessionalsCoverage. Our company can help you get a sufficient amount of coverage without hurting your bottom line.


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