1

Hey, all I was thinking about trying to take a couple of occasional side gigs from Field Nation or OnForce in the evenings and or weekends. If I were a fulltime independent contractor, I would make sure I had the necessary insurance and possible incorporate to protect myself. Would this be necessary for some occasional side work? Or maybe I should see about mowing lawns or flipping burgers.

Thoughts…

12 Spice ups
2

I’ve been doing consulting full time (7 years) and part-time (11 years). If you want like malpractice insurance, if it is available it is very expensive. I have just a General Business Liability policy that protects me from certain things. For example, if I leave a box in a hallway and someone trips over it an they hurt themselves. It is pretty much just a formality because I haven’t been asked for a copy in many many years.

If you do gigs for state / local government, that’s another ball game. They may want copies of Worker’s Comp Insurance (which you can exempt yourself as the only employee, copies of auto insurance, they may want certain limits on your general liability policy, and they may want themselves listed as another insured on the policy (which your agent usually can easily do).

3

Waste of money. I’ve also found that these service companies are kind of a joke.

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4

We can all tell you what we’d do (personally I wouldn’t do it). However, you need to assess your risk then weigh the benefits the insurance would provide against that risk, just like you would when considering assurance on any other front.

You say you’d make sure you had it if you were a full-time contractor. Figure out what the difference is between what your considering doing and being full-time - ideally in dollars, though you may only be able to realistically do it in hours or even number of jobs per day/week/month - then gather costs for insurance and figure out if those costs are worth it.

5

FYI, my GL policy costs about $250 per year. Not the cheapest but not the worst. Helps to have if you have prospective client that asks you for it. You won’t look stupid. Otherwise, you’ll be saying “let me work on this”, or “give me a week to get you a copy”. You’ll look more professional if you can produce it quickly.

6

My side gig was writing software apps for companies with a lot of data who wanted to improve their sales. We wrote analytics apps for salespeople.

I’d encourage you to think through what can happen. For me (as a paranoid security guy), breaches of my network were of the utmost concern. What if I was attacked in order to get access to my customers data? What if I accidentally disabled authentication to an app and a competitor stole the data without me being involved?

The first thing we did to protect ourselves was to ensure we had processes in place to limit these things from happening.

Another way we limited risk is to write it into our contracts. A favorable term for both parties is that you will be liable for 100% of the value of the contract.

You can choose to insure yourself against the liability you carry, or not. By limiting it to a known quantity at least you can make an informed decision.

Disclaimer: I am not a lawyer.

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7

Thanks all it sounds like it depends on how much money I would earn if it would be worth it. I also might have to compete against full time contractors who may already carry this. Since this is just moonlighting.

8

Even though you call it a “side gig”, I would consider formalizing it a bit more for the added benefits.

First, you probably want to form an LLC (at least), if not an S-Corp.

  • If not for the taxation benefits alone, not to mention the semi-release of legal burdens *
  • Taxation: Corporations pay less tax, than people - so let the business make the money (and pay yourself minimally)

Then, you do want to treat it as a business and have everything that you would expect a business to have.

  • $1M Liability Insurance with a $1M Umbrella policy cost me $900/yr through The Hartford *

  • This may be excessive to your needs, but you get the point.

  • I handled gov’t contracts and medical/dental offices.

Lastly, keep track of everything you do for clients (yes, even family).

  • Keep receipts, mileage, etc, and file your taxes appropriately.

  • I don’t know the current IRS laws, but I believe that you can find many benefits for running your “side gig” as an actual business.

****** I realize this is more info than you asked for, but it may (or may not) be useful one day ******

9

don’t FN and OF have insurance?

I would opt out of it if you want to be on their payroll and get side gigs.

if you want to go solo, then get a biz license, LLC, and insurance.

you could always use FN and OF for starter gigs until you get you name out there, then drop them once you get a few jobs yourself.

10

I know a small business owner who is suing a consultant who accidentally deleted his exchange email and phone accounts. He claims he lost a lot of business and wants 200k for that. You have 200k if you lose someone’s contacts? If not, get insured.

11

To add a little to my prior comment, my only worry in your shoes (and those who also do this) is that it only takes 1 mistake to cost you everything you “own”.

Only you know what assets you have (and their value), but if you own anything of substantial value, you definitely want Liability+.

12

It looks like you have to make sure you would have enough side business to make up for the added expenses. Or else you might not really make much of a profit out of it. And I am not ready at this point to try to go full time.

And there is always other ways to make money. I was just wanting a little extra spending cash each month.

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13

If you are billing through a 3rd party, then they probably carry the insurance.

1 Spice up
14

That is exactly how I started, in college though - just wanting side money. However, not knowing anything about your financials, family life, area/people, etc., I have to imagine that everyone is SUE HAPPY these days.

When I was in college, renting a house, paying a car loan, and working on very small businesses, I didn’t worry about being sued or even messing something up that I couldn’t fix (because that wasn’t an option back then - not being arrogant). However, that was several years ago, and the times have certainly changed.

My advice to you, go for it - charge fairly, but charge enough to make it worth your while (and your customers’). I’m sure that I’m not the only one who has started from the bottom and ended up running a small MSP, so it can be very lucrative. If you want/need any advice, I’ll offer you up what I learned from my personal experience - as I’m sure other SpiceHeads will as well.

“If it’s worth doing, it’s worth doing right” - I won’t even try to take credit for that one.

Last point, it’s ok to take a “loss” for a little while (if you can afford it) because you will deduct these “losses” in your itemized deductions… If you take the standard deductions option, it really may not be worth “charging” for your side gig or deducting the expenses - If you need the experience, you may choose to “volunteer” to help people or small businesses for their support of your/their favorite charity, or ask them to pay via PayPal using the “gift” option if you know/trust the end user/client.

I’m not a know-it-all by any means, and you and many others may disagree with my opinions, but if you need any lessons from me, feel free to message me.