Building the A-List: What to Think About When Re-Engaging Independent Contractors

Have you ever worked with an independent professional that you wished you could hire on the spot and have around full-time? It’s a blessing and a curse when truly exceptional independent talent comes into your company. Luckily, there are some best practices you can follow to ensure your talent feels appreciated, and your company benefits from the agility they bring. In fact, one of the best things you can do as an agile business is keeping a list of top-notch independent professionals to pull from for future projects.

The most important thing to remember is that risk follows the project as well as the person. Though you may have dotted your i’s and crossed your t’s when it came to the insurance requirements for their last project, that doesn’t necessarily mean they’re covered for this one. Here are the top things to think about when re-engaging independent contractors, to ensure that your A-list stays protected.

1. A Certificate of Insurance is Not Proof of Insurance

If you’ve worked with an independent contractor before, you likely still have their certificate of insurance (COI) on file. Depending on their policy, and how recently you worked together, it might not even be expired. However, the expiration date on a COI often does not reflect the actual end date of a contractor’s coverage. Because many insurance carriers don’t offer short-term policies, independent contractors are often forced to buy year-long policies for a contract requirement and cancel them when the contract is over to avoid spending more on insurance than they made on the contract. A COI simply tells you what coverage a contractor had on the day the PDF was exported.

For this reason, it’s important to either request a new COI for the new project or direct your contractors to a digital broker who will create a Live COI, which automatically updates to show changes or cancellations.

2. Risk Follows the Project, Not the Person

When you’re creating insurance requirements for independent contractors, the requirement should reflect the risks involved in the work being done. Let’s say you had a freelance IT consultant come in to help with some coding and advise your developers. You required general and professional liability insurance, which offered plenty of protection for the work they were doing. Six months later, you hire the same consultant to clean up your customer database and update your data security procedures. This time, they’ll be handling customer data, as well as having a direct impact on how easy it would be for a hacker to steal information. This time, it would be wise for them to add Cyber to their policy.

It’s important to remember that this goes both ways. If a contractor comes back to do a lower-risk project, it may not be necessary to require the same level of coverage as you did before. Consistently updating your requirements will give you a competitive edge in attracting the top talent.

3. Build a Welcoming Work Environment

Just as you have developed a list of independent professionals you like to work with, the top talent is developing lists of their favorite companies. There are quite a few factors that go into this, and they differ for every contractor, but a few key things consistently set “freelancer-friendly” companies apart.

First and foremost, don’t alienate independent contractors. If they came back to work with your company, you’re doing something right. A common mistake, however, is to onboard them as if they haven’t been exposed to your processes, brand, and employees. Welcome them back with warmth. Let them know that their work on the last project was great and you’re excited to keep building the relationship between them and your business. Keep in mind however that these efforts should always factor in compliance considerations. In many ways, independent contractors cannot be treated like employees without risk of worker misclassification.

Creating familiarity with independent contractors not only increases the likelihood of them coming back to work on future projects, but it also improves brand consistency. The more independent professionals you have on call who are comfortable with your brand, your processes, and your employees, the more agile you can be on important projects that require those things.

This article also appears as a guest article in MBO’s blog.