Does your contractor carry worker’s compensation and general liability insurance?

Does your contractor carry worker’s compensation and general liability insurance?

As a real estate agent, it is important to be positively sure that your contractor, and all vendors you work with, are properly licensed as you do not want to be liable for the work for your vendors. Likewise, as a consumer you should only hire licensed contractors.

The money “savings” is the most common reason people opt for the unlicensed and uninsured vendors, but the majority of the time there ends up being no money saving whatsoever. In fact, it should be a huge red flag if the contractor does not have insurance, as it is required by their profession. If something happens on the job or someone is hurt on the job, you may be liable. Even if the contractor is liable, it does not mean they are collectible. That’s an important distinction. Even if the contractor is collectible you may be sued as well because you are the owner of the property. Litigation is costly and stressful, hiring a reputable contractor helps ensure that your project will be run smoothly.

Insurance is a normal and necessary cost of doing business, so it begs the questions: why are they not insured? Did they have too many claims against them? Can they not afford the premiums? None of those are assuring reasons when hiring someone to work on your property. By hiring a licensed contractor, you can do your own due diligence and be sure they are licensed with the correct licensing authority. The licensing authority will tell you if they’ve ever been cited for violations, or if they’ve ever had their license suspended or revoked. This will give you an indication of the type of contractor you’re hiring.

Don’t be afraid to ask your contractor for proof of insurance before they start working on your property. It can eliminate a lot of headaches down the road. The last thing you want is to be embroiled in litigation because of your contractor, it is better to thoroughly vet your contractor and hire a reputable one than to pick the cheapest bid.

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