Home renovation projects can be a daunting task, and finding the right general contractor can be even more challenging. Hiring a general contractor is an important decision that requires some level of scrutiny. Unfortunately, many people overlook one of the most important factors when hiring a contractor – whether they are insured or not. With that said, in this post, we’ve gathered nine serious problems you will face if you hire an uninsured general contractor. Keep reading to learn more.
1. You May Be Legally Liable if a Worker is Injured: As an employer, general contractors are supposed to carry workers’ compensation insurance to protect employees and homeowners in case of an injury while on the job. But if your general contractor is not insured and one of his workers gets injured on your property, you could be held responsible for the worker’s medical bills, loss of income, and other costs.
2. You May Be Liable for Property Damage: Home renovation may require the use of heavy equipment that can cause property damage. If your general contractor isn’t covered by insurance, and they damage your neighbor’s property or cause damage to your own, you may be stuck with the bill.
3. You Have No Protection in Case of Substandard Work: Uninsured general contractors may not have proper licenses or certifications that ensure quality work. If they perform unsatisfactory work, and you have no legal protection, it could mean shoddy craftsmanship, financial loss, and the end of your home improvement dreams.
4. You Won’t Be Protected Against Liability for Defective or Inferior Materials: If a contractor causes damage to your home during a remodel, or an installed product or material defects against you, you might not have the legal protection necessary to recover damages if the contractor is uninsured.
5. Potential for Fraud: An uninsured general contractor may put your home renovation project in jeopardy through deceit and fraudulent activities. The lack of insurance leaves you open to the possibility of encountering fraudulent and shoddy contractors who are interested in ripping you off.
6. No Assurance of Completion: If the general contractor you hired is uninsured and something unforeseen happens that causes the job to stop midway (for example, a death in the family), you have nowhere to turn. Everything they have done up to that point will be lost, and you’ll have to start all over with a new provider.
7. Risk of Delays: Hiring a general contractor that is not insured may cause delays in your home renovation project. This is because most public and private buildings require contractors to be insured, and without this basic requirement, your contractor may not meet the stringent requirements set by your local authority.
8. Limited Access to Financing: Banks and credit unions will hesitate to provide financing to contractors that lack insurance coverage, even if they have a good track record. Thus, if you choose a contractor without insurance, it may be difficult to find financing options.
9. Limited Warranty Coverage: Most contractors offer warranty protection, but if the contractor is uninsured, they may limit the length or extent of their warranties, leaving you with little to no protection in the event that something goes wrong with their work.
There you have it, nine compelling reasons why it’s important to ensure your general contractor is insured. In conclusion, remember that it’s key to verify whether your contractor is insured or not before hiring. Doing so can help you avoid unnecessary stress and financial loss. At Landau Real Estate we are licensed, bonded and insured. Our five star Google rating speaks to the quality and thoroughness of our work.