Contractor without liability insurance: What are the risks

 There are risks involved even on a small job, But I   would ask your insurance agent, you may be covered under your homeowners insurance if  you hire an uninsured contractor and something happens.

Benchmark Projects

in Construction 13 years and 10 months ago

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Nicholas | 13 years and 10 months ago

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Friends of ours recommended a contractor to do painting and a few minor renovations in our condo, but he does not have liability insurance. We trust our friends recommendation, but still want to cover ourselves. Do people think hiring someone without liability insurance is asking for trouble? The contractor is licensed with the Dept. of Consumer Affairs.

jockdeboeraia | 13 years and 10 months ago

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You will most likely find that the building will not allow someone like to to do work in the building.

likemike | 13 years and 10 months ago

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I would suggest you consult with your condo board (or your sponsor if he’s the only one on the board). When my neighbor hired contractors to do work in his condo backyard, our sponsor wanted the contractor’s insurance info.

wyckoff | 13 years and 10 months ago

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Despite your friend’s experience, that is a big red flag. An uninsured contractor is one that doesn’t have enough business to properly run his operation. Best case is he’s just starting out (inexperienced), but more likely is he isn’t able to generate enough referrals due to the quality of his work. That’s a pretty big detail for a contractor to miss. Check your homeowners policy – if something happens you are probably not covered.

Kensingtonian | 13 years and 10 months ago

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I hired a few people with no insurance for smallish jobs (painting, etc) and it was just fine. It really depends on the level of work you need and the quality. One of my friends works as a union carpenter and does beautiful jobs on the side so it’s not worth it for him to get insurance and shell out $5K a year just to do small side jobs. His work is much better than some of the “licensed contractors” whom I’ve dealt with or whose work i’ve seen. If you are planning to pay in cash, your risk is very minimal unless the guy damages something in your apartment or neighbor’s apartment, you’ll end up paying for it. Or a slight chance that he’ll hurt himself in your apartment, then you are responsible but frankly, if you’re paying cash, who the heck will be able to prove it? (I am not a lawyer or play one on TV).

stevecym | 13 years and 10 months ago

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The worst thing about this – and I am not a lawyer – is that if he has an accident at your house and is in business, not a friend doing a favor – your insurance will pay out and then take him to court to recover.  He can lose his house (my house is listed as the protected asset on my business policy).  Really the insurance protects him.  I like to tell people I am insured as if something does go wrong, there is another avenue of coverage besides just the owner’s insurance.  Still, your coop board will probably want coverage because it is stipulated by their insurance or a bank.If you really want to recommend that this guy buy insurance, contact me and I can give you the name of a broker.  Insurance for us small contractors is reasonable.  The 5K figure mentioned above kicks in for small GC’s and it goes up from there (i’ve shopped). Steve http://brownstoner.staging.wpengine.com/tinkerswagon