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,
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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