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Protecting your organization: Key considerations when hiring independent contractors

Hiring independent contractors for specialized tasks can be an efficient and cost-effective solution. However, ensuring your organization is adequately protected requires careful consideration beyond simply signing a contract. Here are key steps to safeguard your organization when engaging independent contractors: 

Choose wisely: 

While outsourcing may seem attractive, not all tasks are suitable for just any contractor. High-risk work like electrical repairs, roof maintenance, fire safety inspections or construction should be carefully evaluated before selecting a contractor for the job. Consult your internal experts and consider the potential consequences if something goes wrong. 

Verify credentials: 

Thorough research is crucial. Check the contractor's BBB rating, request references and verify they hold the necessary licenses and certifications for the specific work they will perform. 

Understand the contract: 

A well-written contract is essential. Pay close attention to the limitation of liability clauses. While they cannot eliminate all risks, they should clearly define responsibilities for potential issues arising during or after the project. Consider scenarios: Who covers damage if installed shelves collapse after two weeks? What happens if a tree removal damages a neighbor's property? Ensure the contract addresses these possibilities and outlines financial and repair responsibilities. 

Secure proper insurance: 

Contractor insurance is vital. Verify they carry adequate coverage based on the work performed. This often includes general liability, auto liability, professional liability and workers' compensation insurance. Consider builders' risk insurance for construction projects and pollution liability for environmental hazards. 

Additional insured status: 

Adding your organization as an additional insured on relevant contractor policies provides added protection. Discuss this option with your Church Mutual insurance professional. 

Leverage Certificates of Insurance (COIs): 

COIs verify an active insurance policy. Discuss the role of COIs in your contracts with your insurance agent or broker. 

Seek legal counsel: 

Never underestimate the value of legal counsel when drafting or reviewing contracts. Their expertise can ensure your organization's interests are protected. 

Remember: By following these steps, you can minimize risk and ensure your organization operates smoothly while leveraging the expertise of qualified independent contractors.