If you are being paid for your time, then you are a consultant (I think). Therefore, any insurance liability should be very low.
I don't see any need to get registered as a consultant, but laws vary from state to so, so, yeh, speak with an attorney.
If you want him to sign document in regards to price, terms, etc, which I think is a very, very good idea, it can sometimes be a bit uncomfortable since you're friends. So, I think that it's good to use phrases like "this is for reference later" or, "It's easy to mis-remember things after a lot of time passes" etc.
It's important to go over every part of the document in a way that if an issue arises later, it won't be seen as a 'gotcha'. Usually an informal setting is best.