Utilization of independent contractors by companies is extremely common. A critical element of that relationship is that as between the company and independent contractor, there is a limitation on the liability the company has for the well-being of the contractor. Similarly, the contractor enjoys the benefit of executing an assignment without being liable to the end user.
However, there is a third cog in this relationship that is critical: The company's customer. A very critical separation of the liability chain above is when the contractor is performing services for the company in direct contact with the company's customer. In that situation, the Minnesota Supreme Court has previously held that the doctrine of vicarious liability exists to impose liability for an independent contractor's actions when the distinction between the independent contractor is not made known, the company expressly permits the contractor to deal directly with the client, and the actions of the contractor are negligent or otherwise give rise to a claim.
Vicarious liability means that if you are the company retaining an independent contractor you must be in control of the contractor and contractually ensure you are protected. If you are the independent contractor, you need to assess what scope of services you're willing to provide and whether you have insurance to cover what you are doing. The stakes are high, but the answers are simple in this situation.
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