As more companies turn to independent contractors and freelancers to fill skill gaps and increase operational agility, insurance becomes a critical—but often overlooked—piece of the puzzle. One of the most alarming scenarios for businesses is when a contractor files a claim… and doesn’t have the proper coverage.

Whether the claim involves property damage, bodily injury, or a professional mistake, a contractor without insurance can quickly become your company’s liability. At Bunker, we’ve seen firsthand how damaging this situation can be—and how easily it can be avoided.

Let’s walk through what really happens when a contractor files a claim without coverage and how you can protect your business from the fallout.

1. The Contractor Assumes Full Financial Responsibility — But Won’t Always Pay

When an uninsured contractor is responsible for an incident, they’re technically liable. But in reality, most freelancers don’t have the resources to cover five- or six-figure damages, let alone the legal costs associated with a claim.

In that case, guess who the affected client or injured party will come after?
You, the hiring business.

This is especially common in roles where contractors are client-facing, on-site, or providing advice, like:

IT consultants
Event planners
Designers
Construction subcontractors
Business coaches

2. You May Be Held Liable Through Vicarious Liability

Even if your contractor is legally classified as an independent worker, your business can still be found liable through a concept called vicarious liability.

If the contractor was acting on your behalf and caused harm or loss, the courts (or your client) may see your company as responsible. This can lead to lawsuits, reputational damage, and even breach of contract if your vendor agreements required proof of insurance.

3. You Could Breach Contractual Obligations

In many industries, contracts with clients or partners require that all workers—including contractors—carry specific coverage. If your contractor files a claim and lacks coverage, you may have just violated your own contract terms, exposing your company to penalties or termination.

4. Your Own Insurance Might Not Cover the Damage

If you think your business policy will act as a safety net, be careful. Most general liability or professional liability policies have exclusions related to third-party contractors. Insurers may deny the claim if the responsible party wasn’t covered under your policy or didn’t meet stated insurance requirements.

That means you’re paying out-of-pocket—and possibly seeing a premium increase in the future.

The Bunker Solution: Eliminate This Risk at the Source

At Bunker, we’ve created a platform that helps businesses proactively manage contractor insurance compliance—before it becomes a legal or financial problem.

Here’s how:

✅ Require coverage that matches the contractor’s role
✅ Instantly verify proof of insurance (COIs) through buildbunker.com
✅ Offer coverage directly to contractors who don’t have it
✅ Automatically track expirations and renewals

By embedding insurance verification into your contractor onboarding process, you can reduce risk, avoid liability surprises, and ensure full compliance from day one.

Final Thoughts: Prevention Is Protection

The worst time to discover a contractor is uninsured is after something goes wrong. Claims can’t be retroactively covered—and the financial and legal consequences can be devastating.

Smart businesses don’t just assume their contractors are covered—they verify it, enforce it, and automate it. That’s what Bunker was built for.

Visit buildbunker.com to learn how we’re helping companies manage contractor insurance the right way—without slowing down hiring.