CBIZ Sattler Adventure Sports Blog

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Ward, Hayden
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Does My Adventure Sports Insurance Cover 1099 Guides?

1099 forms for outfitters and guides

When insuring your outfitter and guides business, you have probably had questions regarding 1099 guides. Oftentimes, 1099 paperwork can be difficult to understand and extremely complex. It’s always best to consult with an attorney and accountant before structuring your staff and how to handle workers’ compensation laws.

There can be many different opportunities for your business to hire out contracted work. In this article, we are going to address the basics of 1099 guides and paperwork for those occasions.

What is a 1099?

According to  Quickbooks, “1099-MISC  summarizes income from all non-employee compensation. This is an information return that is filed with the IRS so that the IRS can match vendor payments with the income they report on their tax returns.”

In simpler terms, 1099s tell the IRS what you paid contractors throughout the year, and how much the contractors will owe. Anytime you’ve hired and paid more than $600 to vendors during the year, you must send out a Form 1099. This would include any partnerships or LLCs you have contracted throughout the year.

Aside from non-employee compensation, there is a possibility you may need to file a 1099 for your rent payment unless you are renting your property from a property manager.

Who is a 1099 Employee?

Someone who is considered a 1099 employee will not fall under the normal employment classification rules. Spotting the difference between a 1099 employee and others is easy to recognize. For example, you hire an independent contractor to create your company’s logo. They will not be your employee after completing the logo. When in doubt, ask your attorney, check the state Workers’ Compensation website or contact your insurance agent.

Independent contractors  are considered 1099 employees. They work under their own guidance instead of a permanent worker who takes direction from your company. Even if you were to hire a guide who is paid on a 1099 and given the power to hire their own employees, dictate when they work and provide their own equipment, they would still be considered independent contractors.

Traditionally, workers who receive a W-2 tax form are considered employees and those who receive a 1099 are independent contractors. However, you might be required to provide workers’ compensation for 1099 contractors depending on the laws in your state.

A workers’ compensation policy provides coverage for an employee if they are injured on the job. It is required by law; however, in many states, an employer must have a certain number of employees before the law applies. Regardless of your state requirements, if an employee is injured, you may be held responsible for an on-the-job injury. Without a workers’ compensation policy, the injured employee is allowed to sue you for damages.

An employee could be:

  • Someone on your payroll
  • Someone you hire to do a job on your property, for instance, a guide who is otherwise an independent contractor
  • The high schooler who mucks out the stalls or does odd jobs around the property.


Insurance That Understands Your Unique Business

Form 1099s are subject to Fair Labor Standards Act requirements, tax law, workers’ compensation law and the insurance company’s guidelines and policy. These complicated documents may have liability insurance and workers’ compensation implications. Make sure to send any employment contracts for your 1099 workers to your insurance agent for a thorough review.

When searching for a commercial business policy you may find that some policies don’t have all the coverage you need or the insurance agent doesn’t understand your business and its unique risks. By working with CBIZ Adventure Sports, you have an agent who’s an insurance and adventure expert.

A successful adventure depends on many factors, as does calculating the cost of coverage for your unique business. The best way to determine the right coverage and its cost is to talk to one of our experts. Request a free CBIZ Adventure Sports Insurance quote.

This blog may contain scenarios that are provided as examples only. In an actual claim situation, coverage is subject to the terms, conditions and exclusions of the policy issued. The information provided is general in nature and may be affected by changes in law or the interpretation of such laws. The reader is advised to contact a professional prior to taking any action based upon this information.

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CBIZ Sattler Adventure Sports Insurance, a division of CBIZ Insurance Services, Inc., is the largest insurer of adventure sports businesses in the United States. As part of an $850 million New York Stock Exchange traded company (CBZ), we developed a policy coverage to meet the needs for those in the recreation and outfitting industries. Our policy is underwritten by an A.M. Best Rated A++ (Superior) company.