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Best In-Class Business Insurance for Technology Firms & IT Consultants
The phrase “1099 employee” is spoken many times during our conversations with Human Resources Managers and owners of information technology companies. It seems to be difficult for businesses to determine the status of workers for tax purposes. Knowing the steps to take will make the process easier and will help you avoid any penalties for wrongly classifying contract employees. Here are some highlighted points on what the Internal Revenue Service says about 1099 workers.
The IRS refer to common laws that define how to classify workers:
Differences between Employee and 1099
Employees are paid on a w-2. Taxes and Social security are taken out of their salary. Anyone who performs services for you is your employee if you can control what will be done and how it will be done.
Independent Contractors (1099) are self-employed and are responsible for understanding the tax obligation check out this site to help. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center
1099 ARE NOT EMPLOYEES
The definition of a 1099 is that of an INDEPENDENT CONTRACTOR. They can be a separate entity, LLC or Corporation; they can also be an individual or Sole Proprietor.
If you are still confused on how to classify your workers the IRS will help you determine the proper way to classify your employees. The website gives you an interactive page to submit the request. Properly classifying your workers will enable you as the employer to avoid costly fines and penalties.
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Commercial General Liability (CGL) is a form of property and casualty insurance that business should have to protect them against liability claims. It mitigates the risks and costs associated with a business being sued. Instead of liability claims resulting in expensive and timely litigation, the risk is transferred to the insurance carrier that the policy is in place through.
Whether at fault for a claim or not, a business may still be held liable for damages that occur. The insurance carrier will cover the costs, up to the policy limit, that are associated with a claim made against a business having a Commercial General Liability policy.
A company’s exposure to a risk of liability can vary depending upon the different activities involved in conducting business. Specifically, a general liability policy is recommended if your business:
Businesses are likely to face financial setbacks that are difficult to overcome without adequate coverage in place. Liability insurance could make the difference between having a successful and predictable business environment or an unpredictable one subjected to unforeseen expenses.
Liability claims for bodily injury, property damage, and personal injury are all covered under a standard commercial general liability policy with adequate coverage. These damages and injuries can occur:
Advertising and personal injury can occur if another company feels as though it has been slandered verbally, in writing, or while marketing and advertising . When paying out of pocket, even a false accusation against a business nearly always results in some form of negative financial consequences. A Commercial General Liability policy serves as protection for businesses against these associated costs by diverting law suit expenses to insurance claims.
Depending on the policy in place, an insurance claim through a Commercial General Liability policy can either be covered by occurrence or on a claims-made basis. An occurrence policy handles injury or damage claims that occur while a policy is effective or in force, regardless of when the claim is submitted. A claims-made policy handles only claims that occur and are reported during the policy period. Typically, policies purchased on an occurrence basis have higher premiums than those purchased on a claims-made basis.
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If you are in the IT industry InsureYourCompany.com is the insurance agent you want to work with, we are technology insurance experts and have changed the way you do business. See below a list of professionals who we help today.
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