Protecting Your Business from Contractor Mistakes
Hiring contractors can be a smart way to get jobs done without expanding your full-time team. But when something goes wrong, you might be surprised to find yourself responsible, even if the contractor isn’t your employee. That’s where vicarious liability comes in. It’s the legal idea that a business can be held responsible for the actions of someone working on its behalf, even if they’re not on the payroll.
If you’re in the propane industry – or any hands-on service business – this can have serious consequences. Knowing how vicarious liability works and how to protect yourself before you sign a contract is essential to staying safe and out of court.
What Is Vicarious Liability?
Vicarious liability means that you can be held legally responsible for someone else’s actions if they were doing the work for your business. This can include independent contractors in certain cases, especially if your company had control over how the work was done, or if the contractor acted in a way that harmed someone while doing a job for you. It’s not always clear where the line of separation is. That’s why it’s important to take steps to lower your risk from the outset.
Control Matters More Than You Think
Even if someone isn’t your employee, courts may still see them as part of your business if you control how they do their work. For example, if you give a contractor a detailed schedule, directions to follow, and tools to use, you may have more responsibility for their actions than you realize. Keeping some distance in how the work is done can help draw a clearer line between your company and theirs.
Put the Right Language in Your Contracts
When you hire someone, always use a written contract that clearly spells out the fact that they are an independent contractor. But don’t stop there. Your contract should also include clauses that:
• Make them responsible for their insurance and workers’ compensation
• Require them to follow specific safety rules
• Say they’ll cover you if their actions result in harm or lawsuits
The clearer your contract is, the better chance you will have of protecting your business.
Check Their Coverage Before They Start
Before any contractor begins work, ask for proof of insurance. This should include liability coverage and workers’ compensation. Make sure their coverage matches the work they’re doing. If they hurt someone or damage property, their insurance should pay, not yours. Be sure to keep copies of these certificates and check that their policies stay current.
Train Your Team to Work with Contractors
Your full-time staff should know how to work with outside contractors without taking on extra risk. That means no one should treat a contractor like an employee. Don’t give daily orders, require uniforms, or mix their tools and trucks with yours. These things can make the lines between their company and yours blurry, and blurrier lines mean more risk for your business. A little training goes a long way in helping your staff protect your company’s legal position.
Why This Matters
Propane businesses often hire outside help for installations, repairs, hauling, or even seasonal delivery. These jobs come with real risks such as fire, injury, or property damage. If a contractor makes a mistake while working under your name or your direction, you might be the one answering for it.
That’s why propane companies must know how to identify risky contractor agreements before they happen. When your paperwork is clear, your boundaries are solid, and your contractors are fully covered, you protect your customers, your reputation, and your future. Careful planning now will go a long way in preventing big problems from occurring later on.
