RE: [OSGeo-Discuss] RE: Insurance for contractors?

2009-09-15 Thread Landon Blake
FYI: 

In some states professionals are restricted from forming LLCs or
corporations. The law requires that you are personally liable for your
work.

In some states professionals are only allowed to form special LLCs or
corporations.

This may only apply to licensed professionals at this time, but as the
line between licensed professions and other professions blurs this may
become a more foggy issue.

Landon
Office Phone Number: (209) 946-0268
Cell Phone Number: (209) 992-0658
 
 

-Original Message-
From: discuss-boun...@lists.osgeo.org
[mailto:discuss-boun...@lists.osgeo.org] On Behalf Of Miles Fidelman
Sent: Monday, September 14, 2009 5:23 PM
To: OSGeo Discussions
Subject: Re: [OSGeo-Discuss] RE: Insurance for contractors?

Michael P. Gerlek wrote:
 * in the US, sole proprietorship is the way to go for simple
one-person, garage-based shops

   
Having contracted as both a sole proprietorship and a corporation, I'd 
qualify that one.  Sole proprietorship is easy, but.

- you don't get quite as many tax benefits

- you open yourself up to a lot of personal liability, even with 
insurance - if you have any serious assets (say a house or stock 
portfolio that hasn't completely tanked), putting a corporate shell 
between you and a lawsuit provides some serious protection

- you can simplify some of the paperwork by incorporating as either 
Subchapter S or an LLC

Miles

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RE: [OSGeo-Discuss] RE: Insurance for contractors?

2009-09-14 Thread Landon Blake
Thank you for the summary MPG. The logic described in the example
response seems quite sensible.

Landon
Office Phone Number: (209) 946-0268
Cell Phone Number: (209) 992-0658
 
 
-Original Message-
From: discuss-boun...@lists.osgeo.org
[mailto:discuss-boun...@lists.osgeo.org] On Behalf Of Michael P. Gerlek
Sent: Monday, September 14, 2009 4:27 PM
To: 'OSGeo Discussions'
Subject: [OSGeo-Discuss] RE: Insurance for contractors?

I received a surprising number (+20) of responses to this, many
off-list.  My unscientific summary is as follows:

* some people responded privately, indicating they do not have insurance
and would rather I not
  publicize the issue lest their erstwhile employees suddenly take
notice :-)

* in the US, sole proprietorship is the way to go for simple one-person,
garage-based shops

* seems that a significant percentage of employers aren't going to ask
and/or just don't care,
  and of those that do ask many will waive it if you explain you're too
small to afford it --
  this is certainly the case for small employers (big employers may just
make it a hard requirement,
  knowing they will have enough bidders that someone will meet the
criteria)

* IEEE and possibly other such orgs offer professional liability
insurance at reasonable rates,
  (for some definition of reasonable)

* if you're a (US?) govt contractor, seems like you'll almost certainly
need to have insurance;
  if you're bidding for contracts, things get messy fast

* and if you're doing contract work that seems to require it, just bake
it in as a line item
  in the contract bid -- see if you can just pass the extra costs along

* for longer contracts, some employers will offer the option of taking
you on as a temporary
  employee (which means you're covered by the company's policy)

* for some employers, having insurance might give you more credibility
as a professional
  player -- but it also may be that as open source itself gains more
street cred, this becomes
  less critical

* and, finally, like all insurance, the odds are overwhelmingly against
you ever needing to
  have to actually USE it...


Here's a pretty typical response:

 Do I carry insurance?  No.

 Insurance adds significant administrative and financial overhead to a
one man shop.  If you
 want the one man shop price, you more often than not need to be
willing to go without them
 having insurance.

 If you think about it, this isn't a bad arrangement anyway.  You're
not going to give the one
 man shop such an important thing that you're going to have to turn
around and sue them are you?
 You're one man contract is for doing dirty things that you don't have
time or motivation to do,
 not mission critical business work.  If you *are* having your one man
contract do mission
 critical work, you have bigger problems than whether or not they have
liability insurance 
 in my opinion.


The happy news is that I was able to (oh so gently...) push back to our
accounting and HR departments on the insurance requirement, using the
above typical response and the prevailing evidence I gathered from
this thread showing that most of you don't have insurance and yet,
happily, the sun still rises every morning.

Thanks to all who responded!

-mpg







 -Original Message-
 From: Michael P. Gerlek
 Sent: Monday, August 31, 2009 10:03 AM
 To: OSGeo Discussions
 Subject: Insurance for contractors?
 
 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]
 
 -mpg

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Re: [OSGeo-Discuss] RE: Insurance for contractors?

2009-09-14 Thread Miles Fidelman

Michael P. Gerlek wrote:

* in the US, sole proprietorship is the way to go for simple one-person, 
garage-based shops

  
Having contracted as both a sole proprietorship and a corporation, I'd 
qualify that one.  Sole proprietorship is easy, but.


- you don't get quite as many tax benefits

- you open yourself up to a lot of personal liability, even with 
insurance - if you have any serious assets (say a house or stock 
portfolio that hasn't completely tanked), putting a corporate shell 
between you and a lawsuit provides some serious protection


- you can simplify some of the paperwork by incorporating as either 
Subchapter S or an LLC


Miles

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RE: [OSGeo-Discuss] RE: Insurance for contractors?

2009-09-14 Thread Craig Miller
Best of both worlds... LLC.  Fall through taxation, but offers protection
too.

Craig



 -Original Message-
 From: discuss-boun...@lists.osgeo.org
[mailto:discuss-boun...@lists.osgeo.org]
 On Behalf Of Miles Fidelman
 Sent: Monday, September 14, 2009 5:23 PM
 To: OSGeo Discussions
 Subject: Re: [OSGeo-Discuss] RE: Insurance for contractors?
 
 Michael P. Gerlek wrote:
  * in the US, sole proprietorship is the way to go for simple one-person,
 garage-based shops
 
 
 Having contracted as both a sole proprietorship and a corporation, I'd
 qualify that one.  Sole proprietorship is easy, but.
 
 - you don't get quite as many tax benefits
 
 - you open yourself up to a lot of personal liability, even with
 insurance - if you have any serious assets (say a house or stock
 portfolio that hasn't completely tanked), putting a corporate shell
 between you and a lawsuit provides some serious protection
 
 - you can simplify some of the paperwork by incorporating as either
 Subchapter S or an LLC
 
 Miles
 
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 http://lists.osgeo.org/mailman/listinfo/discuss

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Re: [OSGeo-Discuss] RE: Insurance for contractors?

2009-08-31 Thread Tyler Mitchell (OSGeo)
I've been on all three sides of this issue in Canada as well.  

1 - Hiring requirements due to a funding source required insurance prior
to letting a contract - so the one man shop we had previously hired had
to get insurance to remain working with us (prior to OSGeo, I might
add).  

2 - I've been on the contractor side in a large firm where we _did_ have
insurance, so it wasn't issue then, but I knew other companies who
couldn't bid on similar work because of it.

3 - I also bid on a project before as an independent contractor only to
find this restrictions as a showstopper (there was no guarantee of the
work, so I wasn't going to spend the money).  

At the end of the day, it certainly *felt* like the issue being
addressed was less about professional insurance and more about keeping
independent contractors out of the bidding market.  Sorry to hear you
are hitting it.

Tyler

On Mon, 2009-08-31 at 14:00 -0700, Michael P. Gerlek wrote: 
 Well, this is interesting...
 
 I've already received a number of private responses from people who do not 
 have insurance but wish to remain anonymous so their potential employers 
 don't ask about it.
 
 Feel free to email me directly with your responses to the below questions, 
 and I'll post a summary in a few days with no names attached.
 
 -mpg
 
 
 -Original Message-
 From: discuss-boun...@lists.osgeo.org 
 [mailto:discuss-boun...@lists.osgeo.org] On Behalf Of Michael P. Gerlek
 Sent: Monday, August 31, 2009 10:03 AM
 To: OSGeo Discussions
 Subject: [OSGeo-Discuss] Insurance for contractors?
 
 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]
 
 -mpg
 
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