The EOR Alternative for 1099 Contractors | 1099Policy
EOR vs 1099Policy
Stop paying 20% more to convert contractors into W-2s. Keep them 1099.
An EOR converts your contractor into a W-2 employee, stacking payroll taxes, benefits, and overhead on top of their pay, and ending their independent-contractor status. With 1099Policy, contractors stay 1099 and carry their own coverage, in their own name.
Reroute the IC through an Employer of Record
A.k.a. converting them to a W-2 they don't want, paying for benefits they don't need.
20% of contractor pay per engagement
- ✕ Forces W-2 conversion, kills 1099 status
- ✕ Adds payroll, benefits, PTO overhead
- ✕ Locks contractor to single engagement
- ✕ Months to onboard, weeks to terminate
- ✕ Coverage in EOR's name, not contractor's
- ✕ Overkill for a genuinely 1099 workforce
1099Policy
Issue insurance to the contractor in their own name
Coverage stays in the contractor's name. They stay 1099, you stay clean and compliant.
- ✓ Contractor stays 1099, full independence
- ✓ WC, GL, media liability, all in their name
- ✓ Per-gig, per-day, or per-engagement
- ✓ 45 seconds to bind, instant to terminate
- ✓ Audit-ready COIs delivered to your platform
- ✓ Reinforces 1099 status under the ABC test
Number of contractors
500
Average annual pay per contractor
$75,000
What EOR is costing you annually
20% markup on every contractor engagement, and teams typically cut this by up to 80–95% with 1099Policy
$7,500,000
| Feature | EOR W-2 conversion | 1099Policy Stays 1099 |
|---|---|---|
| What it does | Employs the worker as a W-2 employee | Helps independent contractors obtain coverage |
| Worker's status | Becomes an employee of the EOR | Remains an independent contractor |
| Insurance ownership | Employer-owned | Contractor-owned |
| Workers' comp | Covered under the employer's policy | In the contractor's name (where available) |
| General liability | Covered under the employer's policies | In the contractor's name |
| Professional & media / E&O | Typically a separate policy | Available in the contractor's name |
| Certificate of Insurance (COI) | Not typically issued by the worker | Issued in the contractor's name |
| Additional insured endorsements | Not typically contractor-specific | Available on issued COIs |
| Per-assignment coverage | Not designed for assignment-level coverage | Built for assignment-level coverage |
| Classification analysis | Not required, worker is engaged as an employee | Contractor status remains independent |
| Cost model | Payroll taxes + benefits + EOR fee | Priced per engagement |
| Added cost | Typically 20%+ above worker pay | A fraction of employment conversion |
| Coverage issuance & verification | No contractor-owned coverage to issue | Issue and verify coverage via API |
What is an EOR alternative?
An EOR alternative is any approach that gives you the compliance outcomes of an employer of record, coverage, audit trail, and risk transfer, without converting contractors into W-2 employees. 1099Policy does this with per-assignment insurance issued in the contractor's own name, plus continuous compliance tracking.
How much does an employer of record cost?
Most EORs charge a flat monthly fee per worker, typically a few hundred dollars, or a percentage of the worker's pay, on top of payroll taxes and statutory benefits. For US-based independent contractors, that stack often costs more per month than per-assignment insurance costs for a quarter.
EOR vs. 1099: which is right for my workforce?
Use an EOR when you need to employ someone, such as cross-border hires or roles that fail contractor tests. Keep workers 1099 when they're genuinely independent. The deciding question isn't cost, it's whether the working relationship is actually employment.
Does keeping contractors 1099 expose us to misclassification risk?
Classification depends on the working relationship, not on which vendor you use. What 1099Policy adds is evidence of independence: contractors carrying their own coverage, in their own name, is one supporting signal of contractor status, and every policy and COI is documented for audit.
Can we switch off an EOR without disrupting contractors?
Yes. Contractors come off the EOR's W-2 payroll and back onto your 1099 workflow. Coverage binds per assignment through the API or dashboard, and certificates issue before the next engagement starts, so there's no coverage gap and nobody is re-onboarded as someone else's employee.
What does 1099Policy cover that an EOR would have handled?
Workers' compensation, general liability, and specialty lines including professional, media, and cyber, issued per assignment. Workers' comp is available in 46 states plus DC. North Dakota, Ohio, Washington, and Wyoming are monopolistic states where coverage comes from the state fund.
Bring your last EOR invoice. We'll do the math live.
Teams typically cut their contingent-labor insurance line by up to 90% in the first 60 days. Share your engagement data, we'll show you the savings.