Now, more than ever before, working in technology is extremely lucrative. IT professionals are in high demand, and many can write their own ticket when it comes to running their own freelance business. But as any successful independent IT pro will tell you, being a freelancer in the digital world is not without its risks.
While a handshake and a verbal agreement may seem like a good way to conduct business in the fast-paced tech industry, more and more independent contractors are realizing the need for written contracts. Because without a written agreement, you run the risk of being faulted and sued for anything from a data breech to server issues and more.
Contracts, even the simplest ones, can help avoid lawsuits and/or give you a solid defense in the event that a client does decide to sue. Here’s a look at some of the essential contracts IT professionals should have.
1. Client Relationship Contracts
Defining who you are, what you do, and what your clients can expect from you is a basic contract that outlines the working relationship. It should include:
- Your services: Lays out exactly what work you’ll be performing
- Time lines: Specifies how long projects will take
- Necessary information/materials: What necessary elements will be supplied to you by the client so you can complete the project
- Total cost: A complete outline of costs and when payment will be expected (do you require a deposit and balance due at delivery?)
- Signatures: Both you and your client(s) should sign. Be sure to include anyone who has decision-making capabilities on the project
2. Employee Relationship Contracts
Once you’ve gotten to the point where you can no longer do it on your own, taking on other IT pros as either subcontractors or employees may be unavoidable. And while too much business is a great problem to have, it can also increase your risks so it’s best to be prepared. Drafting an employee relationship contract is the ideal way to define what your workers will be doing and what’s expected of them. Whether you’re hiring an employee, a subcontractor, or freelancer that will work on a project by project basis, the relationship contract should include:
- Services: What services you will expect this professional to perform
- Payments: How will you pay this person, invoicing practices, due dates
- Employment specification: Taxing as an employee? Freelancer/1099? Define the exact relationship between you and this professional and lay out any benefits or the lack of benefits specifically
- Non-disclosure: Specifies that your contractor or employee will not disclose any of your company’s information or details of any projects and/or client information
- Indemnity: An indemnity clause states that the employee or contractor will not hold you responsible for any injuries that occur out of their own negligence (a good idea is to have an attorney write this portion because there are certain legalities that are necessary)
- Signatures: Both parties sign and date
3. Terms and Conditions (Websites and Apps)
- Disclaimers: That fine print that nobody likes to read is extremely important and can protect you in the event of a lawsuit. If you have blogs, ads or link to other websites, disclaimers will lay out that your content is for informational purposes only, that you are not responsible for comments from visitors to your site, whether you are endorsing the products that are being advertised on your site, and any other pertinent information
- Transaction Conditions: If you’re selling your services via your website or app or SaaS (software as a service), you need to specify how payments are accepted and processed, any third party fees that may be assessed and your refund policy
Written contracts are an essential part of running a business, especially if you’re providing IT services as an independent contractor. Because the very nature of your work involves many aspects of confidential and critical data, documents that specify all the details of your services, your relationships with clients, and each party’s expectations and responsibilities are key to protecting you in the event that something unexpected happens.
Of course, it is also important to make sure you have the right insurance policies, to ensure that you are covered if a client decides to sue. If you are in need of professional liability insurance, or would like guidance on the ideal insurance solutions for your needs, get in touch with us today.