Contractors insurance typically covers contractors for on-the-job hazards. This means that they’re going to be covered should someone be injured in the course of their performing the job, or if there is damage to the client’s property. Liability is the big concern, here, so the answer to the question of whether a work-at-home contractor needs insurance may seem fairly simple: If you’re not handling the client’s property, and the client isn’t visiting you in your home, then chances are you don’t need to worry about contractors insurance.
However, you may need to consider some sort of business insurance, depending on the nature of your work.
Beyond on-the-job injuries and damages, there is quite a bit that can happen in the course of your business. For instance, if you make any claims in your advertising, promising to offer better service than your competitor, that might be a sue-able offense, depending on what kind of spin your competitor’s lawyers can put on it. With some form of business or contractors insurance, you’ll be covered for any expenses arising from that lawsuit. Without that protection, your competitor could very well wind up with the deed to your home.
Errors and omissions is another major concern, depending on your line of work. For a graphic designer, it is unlikely that you will ever need this form of insurance. However, if you work in consulting in any capacity, your job is effectively to dole out advice. If someone is injured as a result of that advice, you may be held responsible for that.
Some work-from-home contractors need considerably more insurance than others. Some may require everything from errors and omissions insurance to advertising liability and workers comp for their assistant, while others may find that their home insurance covers most of their risks. Consider the hazards that you face in your line of work. Then, determine whether you feel adequately covered without contractors insurance.