On the Job
Is that independent hire insured? If not, then you'd better be.
Hire an independent contractor, pay the fee, get the work done,
and pat yourself on the back for a smart business decision. But who
picks up the tab if things go wrong--or if they don't go
exactly as planned? It's a good idea to make insurance part of
your independent contractor agreement. The insurance you require
depends on the type of work the contractor does and what your
liabilities are.
According to Alejandra Soto of the Insurance Information
Institute, these are the coverages you'll likely need:
- Workers' compensation: Be sure your contractors are
covered in the case of on-the-job injuries. If they do not have
workers' comp and are injured while working on your premises,
you could be financially liable.
- General liability: The independent contractor should
have a general liability policy with reasonable limits based on the
job risks involved.
- Completion bond: This is a type of surety bond that pays
for damages if the contractor fails to complete the job.
- Intellectual property coverage: If the contractor has
access to proprietary information, be sure he or she has coverage
to pay for damages if that information is improperly
disclosed.
In addition to addressing liability and other insurance issues
in your contract, Soto recommends asking for proof of coverage. If
an independent contractor doesn't have a par-ticular type of
coverage, she adds, it's fairly simple to increase yours to
fill the gap.
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Jacquelyn Lynn is a business writer in Orlando,
Florida.