Legal Question in Insurance Law in California

You would do well to have a consultation with an attorney. As you are asking legal opinions, be prepared to pay their hourly rate. Contact me directly.

Your questions are more for your insurance agent than an attorney. There are too many scenarios under which third-party claims could arise to advise you on all of them. You would probably be best served by having a good insurance agent look at the situation and advise you what coverages you need.

A few things I can tell you though:

Independent contractor status is hard to maintain. It is easy for a contractor to slip into employee status. "Control" is the key element in the analysis of contractor versus employee. Most agents stay independent enough to be contractors, but you have to make sure to give the agent as much freedom to exercise independent professional judgment and control their own business, being as much as possible only responsible to you for results (impossible, I know, but err in that direction). If you maintain the independent contractor status you get out from under workers comp., employment taxes, etc.

BUT!!! You don't get out from under liability. An employer is liable for an employee not because the employee is an employee, but because employees are AGENTS of the employer. So as long as the agent is your agent you have liability exposure for anything the person does in the course and scope of the agency relationship. So, if the agent gets sued, you will too and yes your assets will be at risk, whether outside the E&O or if the damages are more than the E&O coverage.

Which brings me back to the original answer: talk to your insurance agent and make sure you have adequate coverage.