Do I really need General Liability?

Question

I was hired to work for a company and I have been receiving checks from him without taxes being taken out. Here are a couple things...

1) I am just myself, no wife and kids... doing a 1099 though I have not filled anything out yet...(make sense?)
2) I was called to get general liability insurance so when his company is audited, I have proof. He gave me another option of going under his but ... I would still pay?? I figure that should be his doing
3) The company I work represent is his side company but I receive checks from a ceiling company he owns, again this is a tax free check.

Question part B
I don't think I am being screwed but my guess is he's saving his *** from the audit, correct? Well how is it that I need GL insurance when I don't have a company or anything of that sort?

Answer 1

Sounds like he is requiring you to have the insurance to keep working there. It is to protect him as well as you. If you own anything, or might own something in the future, the insurance will protect you. Besides, it is tax deductible since he is going to 1099 you.

You will have to pay taxes so you should talk to an accountant so he can tell you how much quarterly taxes should be sent in. There are other rules for the self employed but, all you wanted to know is about the liability insurance. Get it. It is usually very cheap compared to other types of insurance.

Answer 2

And make sure you keep receipts and records of all your expenses to deduct from your taxes, because you are going to get hit hard with taxes when it comes time to pay!