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As your business grows, so will your staff — and so will your business insurance needs. You can essentially break down your hired hands into three categories: Freelancers, contractors and employees.

Freelancers and contractors have a lot of overlap. But they have enough differences to be categorized separately.

Here's what you should know about each one before making the hire:


If you're running a small business out of your home, freelancers are often the way to go. With most freelance work, your responsibilities begin and end at paying them for their services. If freelancers have any insurance needs, they're typically going to take these up on their own time — or with their freelancing agencies, if needed.

If you have a freelancer on the premises of your business, then the same liability concerns apply for anyone else on your premises. But this is frequently not the case when dealing with freelancers. In fact, most freelancing these days is done online — with the client and provider never even meeting in person. Still, your insurance needs to address this person’s presence in your business activities.


Liability can be a concern when bringing on contractors, but you can eliminate most of your risk by making sure that your contractors carry their own insurance. Contractors — such as construction companies and security firms — are generally expected to provide all the requisite insurance for their own employees so that the client doesn't have to sign up for a whole new policy just to bring in temporary help.

If you're looking for assistance with your contractors insurance needs, Action Insurance Company can help. We insure general contractors and can help with the insurance needs of sub-contractors as well.


The minimum required insurance for employees will vary from state to state and from industry to industry. Generally, you are going to at least want to provide workers compensation, whether or not you are legally required to purchase this type of protection.

If you have even a single employee on the payroll, you're going to want to invest in workers compensation. This is important because you don't want to be held personally responsible should they be injured on the job. Certain federal mandates regarding health insurance were dropped in 2019, but you should check with your insurer to find out what is expected of you as an employer on a state level.

It's very exciting when your business is earning enough that you can hire full-time employees to help you with some of the work load. Still, bear in mind that new employees mean new business insurance needs.

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