Contractors, liberal professions or consultants who wish to have a written agreement with their client may establish an agreement with independent contractors. Similarly, customers, customers or companies wishing to use contractors and sketch out the service agreement by a written contract. An independent contractor contract, also known as “agreement 1099”, is a contract between a customer willing to pay for the provision of services by a contractor. According to the Internal Revenue Service (IRS), an independent contractor is not an employee and, therefore, the customer is not responsible for withholding taxes. In most cases, the contractor is paid by contract and not by the hour, unless the contractor is a lawyer, accountant or equivalent contractor. While there are many ways to distinguish an employee from a contractor, these are some of the most common ways to distinguish an employer (or client) between the two types of workers. The language of the contract should specify that the company will not offer liability insurance, liability insurance or other general insurance to the contractor. The contractor is not covered by the company`s liability insurance. This clause protects you in the event of a breach or loss caused by the contractor.