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This post is unfortunately long, and pertaining to business entities and insurance. I have contracted for 6 months on 1099 in the past with no LLC or insurance. The only other time I’ve done contract work was twice on W2.
This week I interviewed for a fixed term contract which was a good match, but they ultimately let me know that in addition to an LLC (which I could get quickly) they needed me to have E&O coverage and I am assuming general liability.
For my own education how often is this an issue?
How many of you carry insurance for your contract/freelance work? And what types of insurance are typically required/recommended?
Is this commonly expected and how much do various business insurance cost annually?
For those of you who have insurance and LLC etc. how do you account for the cost in your pricing (legal, licensing, insurance, overhead)?
Never needed either when I was doing consulting/contracting work — not saying this is the right or best way, just what I did during that period in my career.
Cannot say enough about the importance of carrying insurance as a contractor or working with an agency that carries insurance that covers you.
In this age of data breaches and cybersecurity threats, you can literally be bankrupt if you are working with company data without insurance.
Based on what I am learning from different channels, if you’re not ‘all in’ on consulting, it’s not the best idea to work 1099 jobs. I’ll stick to W2 only.
Yes - I wouldn't recommend chasing true freelance opportunities if you're not equipped with the full suite of business coverage for your contracting.
The LLC piece of the puzzle is more variable, as it's usually dependent on the state in which you are working and where the business you are contracting to is operating. For example, if you're in California and the business you contract to is also in California, you'll likely need an LLC because of California's employment laws.