An independent contractor is a person, business, or corporation that provides a product or service that is agreed upon by a written contract, or sometimes a verbal agreement. Unlike employees, independent contractors do not have a regular employer. Some contractors choose this option because they like the flexibility to work when and where they want, the opportunities for independence and creativity, and the ability to pursue a variety of interesting jobs. The draw of entrepreneurship is exciting to anyone looking for an alternative to a 9 to 5 job. However, many independent contractors do not consider professional liability.

Professional liability is the legal obligation a professional has to their client for the product or service they provide. Independent contractors are liable just like any other professional and are required to deliver the service agreed upon, accurately and reliably. When taking on a new job or even a change in a working relationship with an existing client, you need a contract.

What should the contract include?

A contract protects the independent contractor and clarifies the employment expectations and the role of the client. The contract should state who the independent contractor will report to and name a subject-matter expert who will review the work and verify the accuracy of the content. It’s best to agree on one person as the main contact and reviewer, to avoid conflicting instructions and maintain continuity. The contract should also describe the consequences of changing the deadline, the budget, or the scope of work.

Before entering into a contract and taking on the job, it is in the best interest of the independent contractor to seek legal advice from a lawyer. If you don’t agree with a clause in the contract, or would like to add or remove something, the lawyer can advise you. Legal advice protects against any potential risk, errors, oversights, or loss that could result from an incomplete or poorly worded contract.

What is professional liability insurance?

To protect their work product or service, many independent contractors have professional liability insurance, also commonly referred to as “errors and omissions” insurance. This insurance provides protection from any potential claims by a client of error or negligence. Many insurance companies across Canada and the United States provide such policies.

The liability insurance policy should be clear and fair. It should identify the insured party and who would pay compensation for harm or loss (indemnification). The damage coverage should be appropriate to the potential risk, and the policy should state the limits of insurance, including the maximum amount of insurance paid per occurrence. Most importantly, the policy should include an errors and omissions insurance clause.

Traditional professionals such as doctors, lawyers, and accountants are required by a governing body such as the Law Society or College of Physicians and Surgeons to have liability insurance before they can practice their profession. The cost associated with this insurance is typically covered by the firm they work with. Other professionals such as independent contractors, realtors, and consultants are responsible for the cost of this insurance and pay it out of their own pocket.

Why do technical writing contractors need liability insurance?

This expense is well worth paying because liability insurance covers claims made against the independent contractor for any wrongdoing or negligence. It is the cost of doing business in a world where litigation is common.

The smallest mistake could cause a significant loss and expense. A misinterpretation of the contract terms could affect how the product or service is delivered. The results could be detrimental to the contractor’s — or the client’s — professional reputation and lead to expensive and lengthy lawsuits or, in some cases, even financial collapse. In this competitive market for independent contractors and all professionals, providing an exceptional work product as well as developing solid client relationships is important to building a successful business. As part of building a solid business, protecting it from unknown risks provides peace of mind.

Disclaimer: This article is not intended to provide legal advice. Consult a lawyer or insurance professional for information about contracts and liability insurance.

Tanya Vasto

Tanya Vasto is a Technical Communications student at Simon Fraser University with a legal background who enjoys writing and who is looking to develop a career as a technical writer.