Hiring a contractor and wondering about things like insurance? Contractors can save you time and money, OR, they can turn any project—especially a larger one—into an absolute nightmare. How things turn out depend on how well you’ve done your due diligence beforehand. In today’s article, part one of a series, we’ll be guiding you step-by-step on how to avoid very costly mistakes...and know how to spot a scam when you see one.
Much of this information comes directly from the Federal Trade Commission, and its advice that’s well-worth heeding.
Do Your Research BEFORE Hiring a Contractor
It may sound simple and even a little silly, but seriously, ask your friends, neighbors, and even your coworkers if they’ve ever used a contractor before. Ask them how their experience was and if they would recommend the same person to you. BUT. Don’t just stop there.
If they’ve suggested someone to you, look for the person online. How long have they been in business? Do they have good ratings? Do those ratings come from reputable sources? Google their name along with words like “scam,” “complaint,” and “rip-off.” Google is a powerful utility, and if there are complaints posted anywhere, it’s quite likely to find them.
The final bit of online research you need to perform is whether or not they’re actually qualified to work in your state. Different states have their own licensing laws, and believe it or not, YOU could end up footing the bill for any penalties if improperly licensed work is done. Check with the Consumer Protection Agency to find out what the license requirements are for your town. You can also go the DPOR website to search for a contractor’s license. This is important to make sure they’ve met the minimum requirements to be licensed.
Ask Questions and Get Estimates BEFORE Hiring a Contractor
References
Once you’ve researched a few names and have a handful of promising leads, call them up and get estimates from each one. Don’t commit to anything right now, as you’re still only shopping around. Do not allow yourself to feel pressured into ANYTHING.
Once you’ve asked the first contractor their price, proceed to ask them if they’ve ever done any project like yours before. And if so, how many? Will you need a permit for this type of project? Ask them for their references, especially if you’re hiring them long-term or for a costly project. The contractor you need should be able to give you at least three clients that have had the same type of work done as you, and should be EXPECTED to provide you with their contact info. Call these clients yourself and flat out ask them how satisfied they were. Were there any unexpected costs? Did it take longer than they were told? Did the workers clean up after themselves when they were done? You can even tell the contractor that you’d like to visit jobs in progress.
Insurance
When your contractor is working on a project for you, what happens if they fall off of a ladder or off of your roof, or slips down your stairs? Which one of you is responsible? When it comes to general liability, homeowners’ policies can vary, and if the contractor doesn’t have insurance, you could find yourself in a difficult position if the contractor gets injured or if you are trying to get an item replaced/fixed when the contractor damages something.
Contractors must have two important coverages in place before they step onto your property:
- Commercial General Liability - If they don’t have general liability, they won’t have any coverage in the event they damage your property or cause bodily injury.
- Workers Compensation coverage - If they don’t have work comp coverage, your OWN homeowner’s policy may have to cover their injuries.
Avoid this headache by making sure your contractors have their own coverage. After you’ve obtained the reference list and the references’ contact information, ask the contractor which types of insurance they carry.
Don’t be afraid to ask them for copies of their insurance certificates. This is a common request and EXPECTED for people to ask. Insurance agents send certificates of insurance (COIs) all of the time. If the contractor doesn’t have a certificate, or if they’re not current, YOU could be held liable for any of the above damages or injuries!
The final question you need to ask the contractor is whether they will be using sub-contractors. If so, those subcontractors ALSO need to have all the same licensing and insurance coverages you just asked about.
Armed with these questions, go through each contractor one by one until you find who you’re most satisfied with - price and all.
In Part II of this series, we’ll examine two more of the most important aspects of hiring a contractor: payment options, and the absolute necessity of a clearly worded contract. But if you need help before then, call us! We’re not lawyers, but we will guide to you make sure you are aware of possible issues that can arise when you hire a contractor, and what your best possible options are. Additionally, we can refer you to other professionals whose work and credentials are verifiable. Avoid the scams and reach out today.
Since 1875, Freeman & Sherburne has been serving the insurance needs of clients by coupling a small-town approach with the most current tools to serve you best. We are licensed in Virginia, Maryland and Washington D.C.
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