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Xero – Gold Partner

Employing Contractors

By | January 27, 2016

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Have you thought about what would happen if your contractor or sub-contractor made an error or gave wrong information to a client.

It is really important you do the necessary background check to ensure your contactors are suitably covered in regards to liability insurances.

Yes there are lots of pros when it comes to employing a contractor. However consider the following points:

  • A Contractor can delegate or subcontract work—so who is actually working on your business can be different
  • A contractor generally provides their own equipment – this may be in good working order or not and you need to be aware of what they are using
  • A contractor is legally responsible for their output and therefore they bear the commercial risk of the decision to provide the services to you – do they have necessary insurance?
  • Employers have less control over how the work is done

On the positive side:

  • You can end the contract at any time
  • Contractors can save you dollars because you only contract them when the services are needed
  • Contractors are the way to go when specialists are not available in house

Food for thought:

You may have a verbal agreement in place but a written agreement will ensure there is clarity about what is promised/expected.

Request proof of Public and Products Liability Insurance before you engage a contractor in the form of a Certificate of Currency which will include but is not limited to the following:

  • Insured Name
  • Insurer’s Details including Policy Number
  • Period of insurance to confirm the cover is up to date

One further point is you need to be clear that if the contractor sub-contracts the work, the subcontractor also needs to provide their own Certificate of Currency.

By Sarah Allen

 

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