Deciding to outsource is a small business milestone worth celebrating!

You’ve made it to a point where you feel comfortable delegating to someone who isn’t you. Who doesn’t live and breathe your business the way you do. 

And before you got to this point, I’d bet you set some goals and seriously considered things like: 

–Finances (“I can afford to outsource when I reach $X consistent income.”)

–Strategy (“I want to outsource X because it’s outside my zone of genius.”)

–Commitment (“I’m ready to delegate and communicate about X with someone else.”) 

But I’m about to throw one more major consideration at you. One that you could have easily overlooked… 

Legal. 

Regardless of financial or strategic goalposts, if you don’t have your legal ducks in a row, you may want to hold off on outsourcing until you do. 

**Real quick before we jump in: 

Everything I share is legal education and information. It’s not business, financial, or legal advice, and it doesn’t create an attorney-client relationship between us.**

Intellectual property and outsourcing 

Probably one of the most common things busy business owners outsource is content creation or social media management. 

And when you’re sharing ideas or information, you want to make sure you – and they – understand and agree on what constitutes your intellectual property and how to protect it.

Because the hard truth is that without a written agreement to say otherwise, copyright defaults to the creator at the time of creation. 

Plus, if you’re having them add pictures and other media to your social or blog posts, you need to cover third-party copyright and licensing basics. 

If they’re sourcing photos from the internet, you want to make sure they understand what you can (and can’t) do with them. 

It’s best practice to

–Ask for permission before using a photograph

–Read and understand the license agreement for any photograph you obtain

–Read the Terms of Service for each social media platform you use 

Most of us aren’t doing all – ahem *any* – of the above, but ignorance is not a defense. 

All it would take is one photographer to make an infringement claim, and it could be you, not your content creator or social media manager, under fire. 

You really want to make sure everyone is on board with the legal rules here.

Business contracts and outsourcing

If you’re a serious business owner, you already have business contracts in place for  

–Client agreements

Nondisclosure agreements

–Your website’s Privacy Policy and Terms and Conditions

–Your digital products (like memberships and downloadables) Terms of Use

And having agreements for all of those is no different from having agreements with independent contractors, whether that’s a VA, bookkeeper, copywriter, or an individual in any other niche.

Your independent contractor should be ready with their own agreement. This is not only a sign of professionalism and legitimacy but also helps weigh into the proof that they are an independent contractor, should any legal challenges arise. 

Remember that negotiations are normal – and sometimes necessary – to ensure you both have provisions in place to protect everyone involved.  

(And if you aren’t sure what constitutes an independent contractor, start here.) 

Liability insurance and outsourcing

In case of a copyright infringement claim – among other issues that can arise – you’ll want to look into liability insurance before you outsource. 

Liability insurance can protect you and help cover your legal costs in the event you’re held legally responsible for causing harm to another person or entity.  

Liability insurance helps protect you from: 

Legal claims

If the work performed by an outsourced contractor leads to issues such as copyright infringement, defamation, or privacy violations, you could be held liable. Liability insurance can protect you against potential settlements or judgments and help cover legal expenses. 

Professional errors and omissions

If the outsourced work contains errors, omissions, or fails to meet the client’s expectations, you could face a liability claim. Liability insurance can provide coverage for claims related to professional mistakes. 

Unmet contractual requirements

Some clients or contracts may require you to have liability insurance as a condition of doing business.  

Liability insurance can give you peace of mind, knowing you have financial protection in place to protect what you’ve built. 

And if you’re planning to forgo liability insurance… 

Be prepared for hefty fees when things go South.

SOPs and outsourcing

“It’s easier if I just do it myself.” 

Until it isn’t. 

Outsourcing is a form of delegation and there’s no denying it requires a certain amount of faith that your contractor will do things your way. 

You can make the process a whole lot easier if you have strong SOPs (Standardized Operating Procedures) in place. 

SOPs ensure 

–Clear expectations

–Consistency

–Efficiency

So outsourcing actually takes work off your plate rather than adding to it.

Outsourcing can be a small business owner’s best friend

I know “legal considerations” are easy to overlook. (Especially when there are so many other things that go into decisions like outsourcing.) 

But you won’t regret taking the time to get your agreements set up. 

Because outsourcing is essentially hiring someone to be an extension of you – and your business. 

And that’s worth doing right. 

Need help with your outsourcing agreements? You can find all the templates you need in The Legal Shop.

 

Learn even more about protecting your business when you join the list of exclusive listeners of the Uncomplicating Trademarks podcast. 

 

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