I have been offered a job as a telecom install/repair technician. It is a contract position and requires me to have $2,000,000 in General Liability coverage, which I must pay for myself. How much would this cost? I live in Portland, ME. They told me that all other expenses will be reimbursed. I do also have to buy some tools, but I have a clear idea of what those cost. I have no idea where to start on the insurance.
This job appears to pay much more per hour than what I am already doing. However, I am currently an employee, not a contractor. (FWIW, both this and my current job are on-call positions with highly variable hours)
Keep in mind that you’re getting paid more because you’re going to be a 1099 worker and not an employee. The work isn’t guaranteed, you’re covering you’re own expenses (regardless of what they said*) and remember that you’re going to have to pay all the taxes at the end of the year so make sure to put about 30% of your paycheck in savings since when you’re regular employee that normally comes off the top before you even see it. Also, and probably most importantly, if they don’t need you anymore, they don’t have to fire you, they just won’t, well, have any more work for you.
But, as for insurance, I have no idea.
*You’ll quickly find out about all the little nickle and dime stuff you didn’t know about.
Most insurance companies bill $500 as the minimum for general liability… and so most small businesses are paying $500 for it. (per year).
As far as the insurance goes, though, just call up an agent. Maybe even the same agent who carries your home or auto policies. (In fact, bundling policies can be smart. Because my car, home and business policies are all at the same place, they’ve waived that $500 minimum and I’m only paying $280/year).
The agent can also say whether other policies should be required. For example, whether you’re in a profession where E&O insurance makes sense. Or whether an umbrella policy could help cover a worst-case scenario.
If you’re really worried about risks and liabilities, an attorney can help to clarify where the dangers are, but that might be overkill in your situation.
Make sure to review your existing policies too. If you have a home office, do you need to modify homeowners insurance? If you use your car for business, do you need to modify the auto policy?
Don’t forget to ask about health insurance too. (And, for that matter, remember that self-employed people have to start and fund their own retirement plans.)
I’m not sure if that covers 2mil in liability.
I’m not sure what the max pay out on my current policy, I carry a lot more than other businesses may. My business is wells and water pumps. I work in very expensive homes. If my work results in a flooded basement or a 30 Million dollar home burning to the ground I want a bit more than your standard liability policy.
My general liability is in the neighborhood of $1400 a year.
I was researching this for a business I’m starting, you can get all the no obligation quotes you can eat online. You might look at services like Home Advisor Pro and Thumbtack to see if you can make a living contracting on you own, working on a 1099 usually sucks because your boss is a jerk trying to squeeze every nickel out of you he/she can.
You’ll need a bit more information to get a helpful quote. Is $2,000,000 per-occurrence or a yearly aggregate? Are you required to have a $2m limit for Coverage A, B, and C, or just for Coverage A? Does it need to include workers’ compensation coverage for yourself and any employees you may end up with? Do you need to have an occupational disability policy in lieu of workers’ compensation?
$1m per occurrence, and $2m yearly. I would be working alone and don’t need workers compensation. I only need general liability.
Talk to your current property and casualty guy for a quote. You have a minimum level of coverage needed but you may wish to explore getting even more coverage - for what you get, general liability insurance is pretty cheap.
Also, find a good tax person and make sure you take advantage of every deduction you can. You’re a business and have that obligation. Insurance premiums (relative to your business) count as deductions, as do tools, vehicle costs, special clothing, shoes (steel toe boots). I’m a 1099’er and as far as filing taxes, your obligation is to file quarterly. Mrs. Gap and I filed yearly and got in hot water until we realized our mistake. Penalties and interest are no fun. 1099 work can suck, but these days it may be all you can find. Take it seriously and use every advantage you can, if you’re going to be forced to be a “business” make it work for you.
I’m a sole proprietor painting contractor and pay $500 per year through Michigan Farm Bureau insurance, for those same limits. FWIW, I’ve found there’s a huge spread in the quotes - some companies were quoting me over two grand a year. So definitely call around.
And what everyone else said.
Mine is about 1200 a year for oil/gas well work with those same limits.