RE: [OSGeo-Discuss] RE: Insurance for contractors?
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 ___ Discuss mailing list Discuss@lists.osgeo.org http://lists.osgeo.org/mailman/listinfo/discuss Warning: Information provided via electronic media is not guaranteed against defects including translation and transmission errors. If the reader is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this information in error, please notify the sender immediately. ___ Discuss mailing list Discuss@lists.osgeo.org http://lists.osgeo.org/mailman/listinfo/discuss
RE: [OSGeo-Discuss] RE: Insurance for contractors?
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 > > ___ > Discuss mailing list > Discuss@lists.osgeo.org > http://lists.osgeo.org/mailman/listinfo/discuss ___ Discuss mailing list Discuss@lists.osgeo.org http://lists.osgeo.org/mailman/listinfo/discuss
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 ___ Discuss mailing list Discuss@lists.osgeo.org http://lists.osgeo.org/mailman/listinfo/discuss
RE: [OSGeo-Discuss] RE: Insurance for contractors?
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 ___ Discuss mailing list Discuss@lists.osgeo.org http://lists.osgeo.org/mailman/listinfo/discuss Warning: Information provided via electronic media is not guaranteed against defects including translation and transmission errors. If the reader is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this information in error, please notify the sender immediately. ___ Discuss mailing list Discuss@lists.osgeo.org http://lists.osgeo.org/mailman/listinfo/discuss
Re: [OSGeo-Discuss] RE: Insurance for contractors?
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 > > ___ > Discuss mailing list > Discuss@lists.osgeo.org > http://lists.osgeo.org/mailman/listinfo/discuss > ___ > Discuss mailing list > Discuss@lists.osgeo.org > http://lists.osgeo.org/mailman/listinfo/discuss ___ Discuss mailing list Discuss@lists.osgeo.org http://lists.osgeo.org/mailman/listinfo/discuss