"Contractors must be insured" isn't a requirement until it names a line of coverage and a limit. Start from the loss you're actually worried about in each category.
For anyone doing physical work: cleaning, beauty and wellness, pet care, moving help, healthcare shifts, event staffing, delivery. The contractor's own injury is the loss. In most states a contractor can carry their own policy; a few run monopolistic state funds where only the state issues it.
For anyone working in a customer's home, office, or venue. Damage to the customer's property and injury to the customer are the losses. This is the line customers ask about first and the one your platform terms usually promise.
Professional liability (E&O) for advice, design, tutoring, consulting and other deliverable-based work. Media liability for creators and anything published. Cyber where the contractor handles customer data. Match the line to the deliverable, not to the job title.
Two rules of thumb. Set limits by category, not per contractor, so the requirement is enforceable at scale. And set the state basis to where the work is performed, not where your company is registered. A platform in Texas with contractors in New Jersey has a New Jersey requirement.
The requirement lives in three places: your contractor terms of service, the onboarding screen where the contractor sees it, and the status field your system checks before releasing work. If it's only in the terms, it's a lawsuit exhibit. If it's only on a screen, it's a suggestion.
Write it as a condition of activation: "You must carry the following coverage, in your own name, before accepting your first job on the platform, and maintain it while active." Then list the lines and limits by category. Say what counts as proof (a certificate of insurance naming your platform as certificate holder, with additional-insured status on liability lines where you require it), and say what happens when it lapses: jobs pause until coverage is restored.
Say nothing about classification. The requirement is a condition of using the platform and an insurance control. What a contractor's coverage means for their employment status is a separate question, and one state has now written down that it means nothing when the platform required it (see the New Jersey note below).
A requirement that only says "upload your COI" handles the contractors who already carry insurance. On most marketplaces that's a minority of applicants, and the rest stall at the upload screen and churn. You need both paths in the same step.
Path one: verify. The contractor uploads a certificate. Read it as a document, not a checkbox: the named insured matches the applicant, the dates bracket the activation, the limits meet your category minimums, additional-insured and certificate-holder fields are right. COI Review parses the ACORD form and checks it against your requirement automatically; a person only looks at the exceptions.
Path two: enroll. The contractor has nothing to send. Instead of sending them off to find an agent, coverage is issued to them, in their own name, inside your onboarding flow: a short application, a quote priced to the work, a bound policy and a certificate, usually inside a minute. 1099Policy is the licensed provider that issues it; your platform embeds the step. Claims, certificates, and policy administration route through the contractor's policy, not yours.
How per-engagement coverage is issued →Enforcement is the whole point. Your job-release logic checks a coverage status before a contractor can accept work, and a webhook flips it the moment coverage is bound or lapses. Nobody on the ops team has to remember to check, and nobody starts work uninsured because a certificate was "on its way."
The same status drives the lapse rule: when a policy expires mid-activation, the contractor's ability to accept jobs pauses until coverage is restored. Renewal becomes a product event rather than an email chase.
Onboarding compliance in detail →// release a job only when coverage is active const policies = await ten99policy.policies.list({ contractor: "cn_Ehb3bYa" }) const active = policies.some(p => p.status === "active") if (!active) return hold(job) // webhook policy.active → release(job) // webhook policy.expired → pause(contractor)
Customers, your claims team, and your carrier's premium auditor ask the same three things. The ledger should answer each in one pull.
A note on classification, and on New Jersey. Requiring insurance is an insurance control. In most states, coverage in a contractor's own name is at most one supporting signal in a classification analysis, and never the deciding one. From October 1, 2026, New Jersey's N.J.A.C. 12:11 provides that coverage a platform requires or encourages carries no weight as evidence of independence at all (it isn't held against you either). Keep the two questions separate in your terms, your onboarding copy, and your own thinking. What changes in New Jersey on October 1.
See how verification, on-the-spot coverage, and a status gate keep every contractor on your marketplace insured before their first job.