{"id":77800,"date":"2025-06-01T00:00:28","date_gmt":"2025-06-01T04:00:28","guid":{"rendered":"https:\/\/todaysveterinarybusiness.com\/?p=77800"},"modified":"2025-05-14T18:11:34","modified_gmt":"2025-05-14T22:11:34","slug":"1099s-insurance-protect-and-defend-0625","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/1099s-insurance-protect-and-defend-0625\/","title":{"rendered":"Are Your 1099s Properly Insured?"},"content":{"rendered":"

I handled a recent case in which a veterinary practice received the following notice from its insurance carrier after a workers\u2019 compensation payroll audit: \u201cIt was brought to our attention from the most recent audit that you have uninsured subcontractors. We require you to verify all subcontractors have the proper coverage in place with at least your coverage limits and obtain certificates of insurance. If you continue to use uninsured subcontractors, then we will have to take adverse action on this account.\u201d<\/p>\n

\u201cAdverse action\u201d should grab your attention anytime an insurer uses the phrase. Thankfully, the practice resolved the issues to the carrier\u2019s satisfaction. The subcontractors were relief veterinarians and technicians working under a 1099 designation.<\/p>\n

Defining 1099s<\/h3>\n

When you hire a 1099 subcontractor, you have an independent contractor performing work not as an employee but under the terms of an agreement. \u201c1099\u201d refers to IRS Form 1099-NEC (Nonemployee Compensation), on which you report payments to subcontractors. The workers are responsible for paying withholding and self-employment taxes directly to the IRS. They typically do not receive any of the fringe benefits you provide to W2 employees, like health insurance and, more importantly, workers\u2019 compensation coverage.<\/p>\n

Legally, 1099 contractors are:<\/p>\n