Relying on independent contractors to perform work for you can help you reduce your business liability, and may also help reduce the amount of liability insurance you need. Working with independent contractors, rather than full-time employees, can also reduce your risk of lawsuits, because independent contractors are not protected by many of the employment laws that enable employees to bring a suit against their employers. You also can save on other kinds of insurance, such as workers' compensation.

Keep in mind, however, that working with independent contractors comes with its own set of risks. You must familiarize yourself with Internal Revenue Service rules regarding independent contractors, and ensure that you know the difference between a contractor and an employee. If you are subjected to an IRS audit and forced to reclassify your contractors as employees because you were not following the strict guidelines, you could end up paying back wages, employment taxes, insurance, and penalties.