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  1. #1
    Join Date
    Jul 2018
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    Northern Colorado
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    5

    Default Do You Need Insurance for Side Jobs if You Own a Contracting Company

    My question involves independent contractors in the state of: Colorado

    I currently own my own roofing company, but I wish to take on additional work as a 1099 contractor separate from the company. Can I use my existing liability insurance policy that I have for my company when working as a 1099 contractor doing work that is not contracted through the company?

  2. #2
    Join Date
    Oct 2006
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    15,185

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    Quote Quoting sheetmetalmen
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    My question involves independent contractors in the state of: Colorado

    I currently own my own roofing company, but I wish to take on additional work as a 1099 contractor separate from the company. Can I use my existing liability insurance policy that I have for my company when working as a 1099 contractor doing work that is not contracted through the company?
    Why would you want to run additional work outside of your company? That does not really make sense logically or financially. In any case, no, your company insurance would be unlikely to cover you outside of company activity.

  3. #3
    Join Date
    Jan 2006
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    38,343

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    I presume your (first) company purshases insurance in the name of that company to cover liabilities of that company.

    If you are doing business as a different company (as an ic you are effectively your own one man business), there is no reason the first company’s insurance or anything else would apply to your new personal business.

    You will want to be very cautious about using tools owned by the first company as well as using any merchant accounts established by the first company to operate your new personal business. That could cause issues with both companies as well as you on a personal level.

  4. #4
    Join Date
    Nov 2013
    Posts
    6,155

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    The real question is what kind of business is the roofing company. If it is a corporation or an LLC, then I agree with what JK posted.

    However, if the company is a sole proprietorship doing business as a D/B/A then I would disagree.

    If the latter, OP could work as an IC using his own name and running all transactions through the D/B/A. He would not need additional liability insurance if the nature of the work is the same as what his company does. But there are other issues such as workman's comp if working as an IC he has employees.

  5. #5
    Join Date
    Oct 2006
    Posts
    15,185

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    Quote Quoting budwad
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    The real question is what kind of business is the roofing company. If it is a corporation or an LLC, then I agree with what JK posted.

    However, if the company is a sole proprietorship doing business as a D/B/A then I would disagree.

    If the latter, OP could work as an IC using his own name and running all transactions through the D/B/A. He would not need additional liability insurance if the nature of the work is the same as what his company does. But there are other issues such as workman's comp if working as an IC he has employees.
    Bud, the whole point is that he, for some reason, wants to do this side work outside of the business.

  6. #6
    Join Date
    Nov 2013
    Posts
    6,155

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    But as a sole proprietor, he is the business. His question was would his liability insurance cover him as an IC. He hasn't said why he wants to work as an IC. The only real difference is who the check gets made out to.

  7. #7
    Join Date
    Mar 2013
    Posts
    16,747

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    Quote Quoting sheetmetalmen
    View Post
    My question involves independent contractors in the state of: Colorado

    I currently own my own roofing company, but I wish to take on additional work as a 1099 contractor separate from the company. Can I use my existing liability insurance policy that I have for my company when working as a 1099 contractor doing work that is not contracted through the company?
    The insurance question is simple.

    If you are a sole proprietor the Named Insured on the policy is:

    Joe Blow dba Joe's Roofing.

    If you have an LLC the Named Insured should be:

    Joe's Roofing, LLC
    and Joe Blow.

    That takes care of the coverage.

    The problem with working on a 1099 instead of through the LLC is the erosion of the separation of Joe Blow and the LLC which can reduce and/or eliminate the protections that an LLC provides and allow an opponent to "pierce the corporate veil" (google it).

  8. #8
    Join Date
    Jul 2018
    Location
    Northern Colorado
    Posts
    5

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    The company is an LLC, equal partnership between myself and another owner, no W2 employees.

    I posted this question because my partner takes on additional roofing work (non-contracted, "handshake" agreement) that is not through the company, and he feels that since we have liability insurance through the company then that means he himself is insured for any other roofing work he may do on the side. I disagree with him on this issue and feel this is fraud if an incident occurs and a claim needs to be filed with the insurance, so I am looking for guidance on this.

  9. #9
    Join Date
    Oct 2016
    Posts
    2,750

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    It would have been nice had you told the correct story to begin with. He is putting you and your company at risk by doing it. If he hands a customer a certificate of insurance that says "YOU COMPANY" as the insured I can bet your bottom dollar that if ANYTHING goes wrong with that job the company will be held liable.

  10. #10
    Join Date
    Dec 2009
    Location
    Lake Chapala
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    2,874

    Default Re: Is Additional Insurance Required As a 1099 vs Owning a Company

    Quote Quoting PayrolGuy
    View Post
    It would have been nice had you told the correct story to begin with. He is putting you and your company at risk by doing it. If he hands a customer a certificate of insurance that says "YOU COMPANY" as the insured I can bet your bottom dollar that if ANYTHING goes wrong with that job the company will be held liable.
    Agree.

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