I run a small agency. I hired a freelancer to help with a rush web project. I didn’t know he lifted the “Hero Image” from a Google Image search. We got sued. He ghosted. Now the client is suing me because my name is on the contract.
Key Takeaways
- Vicarious Liability: You are responsible for the work you deliver, regardless of who made it. Your insurance must cover “work performed on your behalf.”
- Definition of “Insured”: Does your policy cover “Independent Contractors”? If not, the carrier might deny the claim saying the error wasn’t made by an employee.
- Subrogation: Your insurance will pay the claim, then they will try to sue the freelancer to get their money back.
- W-9 vs. W-2: The distinction matters for workers’ comp, but for E&O, you are generally on the hook for both.
The “Why”: The Independent Contractor Clause
The Trap: Many solo-preneur policies only cover you (the named insured). If you outsource work, you must either:
- Require the freelancer to have their own insurance (and prove it).
- Add the freelancer as an “Additional Insured” (expensive).
- Ensure your policy covers “Vicarious Liability” for subcontractors.
The Investigation: I Quoted 3 Major Carriers
1. The Hartford
- The Analysis: Their standard policy includes coverage for independent contractors while acting within the scope of their duties for you. This is the safety net you need.
2. NEXT Insurance
- The Analysis: They often exclude work done by subcontractors unless you specifically add a “Hired Non-Owned” endorsement or similar clause. You have to check the box during the application.
3. Simply Business (Broker)
- The Analysis: Good for comparing. They will ask, “Do you hire subcontractors?” If you say no and then do it anyway, you are committing material misrepresentation, and they can void your policy.
[IMAGE: Screenshot of an “Indemnification Clause” in a freelancer contract]
Comparison Table: Subcontractor Coverage
| Carrier | Covers Contractors? | Requires Proof of Ins? | Cost Impact | Best For… |
| Hartford | Yes (Vicarious) | Preferred | Low | Agencies |
| NEXT | Conditional | Yes | Medium | Solos hiring help |
| Basic Policy | No | N/A | Low | True Solos |
Step-by-Step Action Plan
- Check the Contract: Did you have a contract with the freelancer where they indemnified you? Find it.
- Notify Carrier: Tell them a claim has arisen from “subcontracted services.”
- Provide Contact Info: Give the carrier the freelancer’s details. Let the insurance lawyers hunt them down.
- Settlement: Your insurance will likely settle with the client to protect your reputation, then deal with the thief later.
FAQ
Can I sue the freelancer?
Yes, but if they are broke, it’s pointless. That’s why you have insurance.
Do I need to check my freelancer’s insurance?
Yes. In 2026, it is standard practice to ask for a Certificate of Insurance (COI) from anyone you hire.
What if the freelancer lives in another country?
It makes subrogation (suing them) harder, but your liability to the client remains the same. Your insurance still covers you.