Independent contractors form a growing sector of the employment world, with more than 10 million such workers in the United States, according to Navigant Economics. Commission-paid sales people make up a large part of independent contractors, but independent sales contractors do not have an employer-employee relationship with their company, and so are on their own for the insurance that many hourly and salaried workers take for granted.
Health Insurance
Independent sales contractors do not get health insurance from their companies, so it's up to them to find coverage. Self-insurance usually does not come with a group rate, so sales contractors should expect to pay full price on premiums. There are options, though. The American Association for Retired Persons, for example, offers coverage for independent sales contractors older than 50, and some industry-based associations offer health insurance at group rates.
Life Insurance
To protect the independent sales contractor's family in case of death, the contractor needs life insurance. The company won't provide it. Term life insurance is normally the least expensive option, but policies vary by insurance providers.
Car Insurance for Business
A sales contractor's personal car insurance won't cut it if he uses the vehicle primarily for business. In fact, insurance companies will demand higher premiums if they cover it at all. Basic car insurance will cover bodily injury liability and property damage, while collision and comprehensive are optional. If a car is used for business, a contractor will be best protected with a full car insurance package.
Liability Insurance
A customer injured by a product can claim liability and sue a salesperson. While the product manufacturer likely has insurance, this won't cover the independent sales contractor. Liability comes in many forms, including property damage, product liability, or losses caused by errors and omissions. An independent sales contractor can get a business-owner plan that covers several types of liability under one policy, and this is usually cheaper than getting several insurance policies.
Disability and Workmen's Compensation
An independent sales contractor doesn't get workmen's compensation or disability insurance through the company, so he must get his own. These policies will help cover for any injuries incurred while working or any lost time while the contractor is disabled.
Finding Coverage
The independent sales contractor should talk with an independent insurance agent who is not tied to a specific company. The agent can discuss various insurance needs and find the right sources for coverage.
