[consulting] Setting Up as an Independent Contractor

[Sheryl]

Disclaimer:  IANAL and I only do the occasional small side job.  But I'm
on another mailing list with a number of people who are full-time
consultants, and I know that every time this topic comes up they mention
insurance at least as much as contracts.

I believe that the kind of insurance they have is "errors and omissions". 
You don't want a situation to come up in which they pay you $2000 for a
job and then claim that you made a mistake that cost them $2,000,000.  You
can say you've covered that with a contract, say with a clause that they
can't hold you responsible for more than the cost of the job or something,
but there's no guarantee they won't take you to court anyway.  Lawsuits
can be expensive, even if you win.

Other kinds of insurance to think about -- your homeowner's insurance may
not cover computers used for business or may cover only a small amount. 
Get a business rider.  It probably won't be very expensive and should be
deductible as a business expense.

If you don't have a spouse or day job providing health care, etc., get it
somewhere else.  There are billing services out there that will act as
employer of record (for a fee) and some of them participate in group
insurance plans you can buy into.  MyBizOffice (mbopartners.com) is one
that I talked to a few years ago when I was considering consulting
full-time.  I'm sure There are others out there.  Looking at their web
site, I see you also can buy E&O insurance through them.

Also, in the U.S., see if there's a local Small Business Administration
office.  I'm in the Washington, DC area.  They provide some classes and
mentoring.

Good luck,

Sheryl