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1099 contractor lawsuit- my liability as a sole proprietor vs. PC?

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  • 1099 contractor lawsuit- my liability as a sole proprietor vs. PC?

    Hello community,

    This is a hypothetical question- If I hire an independent contractor with his/her own professional liability insurance, and that doctor is sued for medical malpractice, would I be liable (My business would be sole proprietorship, as I do not have employees)?

    I ask this question as I am considering whether or not I should form a PC with S-corp taxation status in California for asset protection.  In the near future, I can foresee paying a 1099 contractor for certain days that I will not be at my practice.

    Thank you for your thoughts!

  • #2
    it likely is a good idea if you will have employees.


    • #3
      WCICON24 EarlyBird
      If the other person truly is an "independent" contractor, you should technically not have any liability for his/her acts. As @Peds stated, liability would be attached to an employee who is working under your direction. I think the first question you need to resolve is whether this person actually would be independent or would be an employee.
      My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 for CPA clients (we are Flat Fee for both CPA & Fee-Only Financial Planning)
      Johanna Fox, CPA, CFP is affiliated with Wrenne Financial for financial planning clients