The very nature of work is changing and for many of us, it means a career as an independent contractor – not an employee. While this can be an exciting choice as every assignment is different, it can also be a journey fraught with ups and downs. For example, you must get used to life without a safety net and this includes knowing that you are on your own when you are sick or injured.
This starts by knowing how to protect yourself; not only in terms of contracts and insurance but also by having someone to fight for you when you are injured while working for your clients. For example, an independent truck driver working around the Big Apple might need to have excellent truck accident lawyers in New York on speed dial just in case something goes awry.
With that in mind, here are some of the best ways for independent contractors can protect themselves.
For those who are acting as independent contractors, you should consider setting up a corporation to run your contracting activities through. Not only will this help to separate your personal property from any potential loss, but it will give you a more effective way to structure your taxes. Let’s face it, as a contractor you are running a business and as such you should set up your accounts to reflect this.
Errors and Omissions Insurance
While it might seem that insurance is an unnecessary expense, especially when you are starting out, the reality is that it can help to protect you from risks. What isErrors and Omissions insurance (E&O), you might be asking? Just like the name implies, E&O insurance helps to limit your liability from any financial losses your customers might experience as a result of the service you provide.
This sort of coverage can be useful in numerous situations as it not only means that you are protected from loss, but it also means that your family will be protected from hardships related to an error committed by yourself, or even a subcontractor who you employ.
Also known and Business Owners insurance, this policy will help to protect yourself in case an accident or some other incident sidelines yourself or your business. This could include a slip and fall on a customer’s worksite, or even some sort of business interruption does to a weather event.
Don’t think that this won’t happen to you. The longer you are a contractor, the more likely it is that something will come up that could sidetrack your business. This could the cancellation of an important contract due to a hurricane or a customer bankruptcy, or even getting sick or injured while on assignment.
Remember you are a contractor and not an employee. As such, you need to protect yourself accordingly.
Medical and Disability Insurance
One of the perks of working for a big company is that you should get a full benefits package. But as a contractor, you don’t have this luxury and this means that you need to make sure you have medical and disability insurance in place at all times.
This is important, maybe part of your work involves using heavy machinery and other tools and this could mean that you need to be covered in case of a mishap. In addition, the medical and disability insurance you can also look at getting what is known as bodily injury and property damage insurance. This policy is likeworkmen’s compensation insuranceand can be useful coverage for an independent contractor as they are usually not protected by their client’s insurance.
As mentioned, you might want to consider having an Errors and Omissions policy in place but keep in mind that this won’t cover every potential liability. As such, you might want to get product liability insurance and for those who are serving food and alcohol, such as caterers or private chefs, then you want to have liquor liability insurance as well.
Beyond these policies, you might also want to consider getting a general liability policy. This coverage will help in two ways. The first is in the case of a third party getting injured, or dying, during the commission of your work. The other way that a general liability policy protects you is from losses tied to property damage – for example, if you or someone working for you damaged your customer’s property. Depending on the type of work you are doing as an independent contractor, having this policy in place can help to protect you from most accidents.
As you can see, the world is full of risk and while having someone to fight for you when things go wrong is important, you also want to make sure your independent contracting business is properly insured.