Managing Relationships with Independent Contractors

As your practice grows and you're ready to expand your team, working with independent contractors can offer you valuable flexibility and bring specialized expertise to both your team and your patients. Managing these relationships effectively ensures that they are productive, mutually beneficial, and compliant with the law. In this blog, we'll explore seven essential tips for working with independent contractors to create smooth, legally sound partnerships.

1. Clearly Define Roles and Responsibilities

Misunderstandings over roles and responsibilities are one of the leading causes of disputes and lawsuits. Before your contractor begins working, create a detailed outline of the tasks and duties they’ll handle. This clarity prevents “scope creep”—when tasks extend beyond the agreed terms—and ensures that everyone knows what to expect, even if project goals change.

2. Address Intellectual Property and Ownership

If your collaboration involves creating content, research, or other intellectual property (IP), be clear about who owns the work. Establish these terms right from the start to avoid ownership disputes, particularly if the contract ends on difficult terms. Your independent contractor agreement should specify who will retain rights to the IP created during the partnership.

3. Draft a Detailed Independent Contractor Agreement

A comprehensive independent contractor agreement is essential. This document should outline the scope of work, payment terms, deadlines, and termination procedures. It serves as a legal safeguard and a roadmap, ensuring that both you and the contractor are on the same page. By detailing all expectations upfront, you protect both parties and reduce the risk of conflict.

 4. Define Compensation and Payment Terms

Transparent discussions about compensation are critical before signing any agreement. This involves discussing invoicing, payment frequency, methods (automated or manual), and deliverables. Clear payment guidelines allow contractors to plan their workflow efficiently, ensuring the focus remains on the work itself.

5. Review Insurance and Liability Requirements 

If a contractor’s work might expose your practice to risks, you’ll need to address insurance coverage. Generally, contractors interacting directly with patients should hold their own professional liability insurance. You may also consider adding them as an "additional insured" on your policy for added protection. In some cases, it’s wise to request that the contractor lists you as an additional insured on their policy. This mutual coverage ensures that both parties are protected.

6. Ensure General Liability Coverage

In addition to professional liability, general liability coverage is essential if you operate a brick-and-mortar business. General liability insurance protects you against claims of bodily injury or property damage that could occur on your premises due to a contractor’s actions. Review your current policy with your insurance agent to confirm that it covers contractor-related incidents, especially if contractors will be on-site unsupervised.

7. Comply with Classification Laws

Compliance with independent contractor classification laws is critical. Misclassifying a contractor as an employee (or vice versa) can lead to serious legal and financial repercussions, including fines and back payments. Ensure that your contractor agreement and working relationship comply with federal, state, and local laws. If you’re unsure, consult resources like our video guide on contractor classification or reach out for legal advice.

To Wrap Up

Working with independent contractors isn’t just about legal compliance—it’s about building clear, adaptable agreements that support mutual success. Open communication, clear expectations, and a well-drafted agreement create a strong foundation for long-lasting, positive working relationships that can evolve with your practice.