Waypoint Insurance - Risk & Business Magazine Waypoint Insurance Magazine Winter 2017 | Page 26

THE INDEPENDENT CONTRACTOR BY: jennifer ADAMS BRANCH MANAGER, WAYPOINT INSURANCE The New Age Of Employment: The Independent Contractor B usinesses are changing the way they look at employees. The flexibility of hiring an independent contractor has become very attractive for both the business and the contractor. Many contractors prefer to work independently, carefully selecting short-term contracts that work into their lifestyle, and organizations like the flexibility and simplicity of contractors. It’s a winning combination for both. There are, however, some challenges that accompany this arrangement from a legal and insurance perspective. This style of working relationship can cause lawyers and human resources managers a lot of grief when it comes to the law. In the event an independent contractor is sued for causing third-party bodily injury or property damage while working for a business, the contractor may not be able to pay the legal fees and damages awarded without adequate insurance in place. Professional Liability Insurance is a necessity for many industries such as wellness clinics, tech firms, and design and architectural organizations. A Professional Liability Insurance Policy does not extend to protect contractors, 26 leaving a legal gap for the organization and the contractor. The failure to deliver work on time, fulfill scope of requirements, or even the failure to meet professional standards are all common professional errors a contractor may be exposed to. Sometimes the lines of contractor and employee become blurred, and as a result, there are many other legal considerations that are worth mentioning such as workplace safety and wrongful dismissal. A contractor who is injured or terminated and who believes he or she was an employee and not an independent contractor can create a legal nightmare. There are important considerations to ponder when hiring contracted staff. In order to protect the business from legal ambiguity and to lessen the confusion as to whether someone is a contractor or an employee, here are a few simple steps you can take to lessen the risk: 1) Hire a lawyer to write the work contract. 2) All verbal and written communications must be clear and distinguish between employee and independent contractor. 3) Request the contractor’s GST/HST number. 4) Make sure contractors are aware that no income tax, EI, or CPP will be deducted from their pay. 5) Contractors should submit an invoice for work provided on a regular basis and as agreed between the business and contractor. 6) Request that contractors provide a certificate of insurance proving liability insurance coverage is in place and that they have added the business as an additional insured to protect both parties. Transfer of risk is more important than ever before, but if you know the risk and do your due diligence to protect yourself, an independent contractor might be the business solution you’ve been seeking. + Jennifer Adams recently joined Waypoint Insurance as the branch manager of our new Marine Drive office in North Vancouver. With an insurance background spanning Canada and the UK, Jennifer brings a global business perspective and outlook to her client’s insurance needs. Contact Jennifer, or any one of our Insurance Specialists at 310-8442 or visit us online at waypointinsurance.ca