A small contractor with no employees working from a garage: which type of insurance is not necessary at this time?

A small contractor with no employees working from a garage: which type of insurance is not necessary at this time?

• A. General liability
• B. Property
• C. Automobile
• D. Workers' compensation

Answer: (D)

The key idea here is that workers’ compensation is tied to having employees. If you’re a solo contractor with no workers, there’s no one to cover, so workers’ comp isn’t required at this time. General liability is still important because it protects you if someone is injured or if property is damaged at a job site. Property insurance covers damage to your tools, equipment, or the garage/shop space you’re using. Automobile insurance is needed for any vehicles you use for the business, such as driving to job sites or transporting gear. So, while workers’ compensation isn’t needed yet, you’d typically want general liability, property, and auto coverage to cover common business risks. You can add workers’ comp later if you hire employees.

The key idea here is that workers’ compensation is tied to having employees. If you’re a solo contractor with no workers, there’s no one to cover, so workers’ comp isn’t required at this time.

General liability is still important because it protects you if someone is injured or if property is damaged at a job site. Property insurance covers damage to your tools, equipment, or the garage/shop space you’re using. Automobile insurance is needed for any vehicles you use for the business, such as driving to job sites or transporting gear.

So, while workers’ compensation isn’t needed yet, you’d typically want general liability, property, and auto coverage to cover common business risks. You can add workers’ comp later if you hire employees.