In the past I've hired some people for contract or consultant work (both open 
source projects and more general stuff) -- generally these people have been 
independent, one-man shops found by word of mouth and reputation, as opposed to 
hiring someone from an agency.

I'm getting pushback now from the administrative side of my company saying that 
any contractor I hire needs to have proof of insurance.  I understand the legal 
reasons for this, but I'm wondering how many of you out there actually have 
business/contractors insurance?  Do companies you work for insist on it, or 
not?  And how many of you are formally set up as LLCs or sole proprietorships 
or such?

[while this is likely a US-centric issue from the hiring side, I'm interested 
in international responses too since I've hired some foreigners as well over 
the years]


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