The Danger Of Using Unlicensed And Uninsured Contractors

The Danger Of Using Unlicensed And Uninsured Contractors


Real estate development is always a gamble for many reasons. There are several risks individuals take as investors, builders, and homebuyers. The one risk you should not take, however, is the use of an unlicensed and uninsured contractor.

Hiring a Licensed and Insured Contractor

When an accredited general contractor takes on a project, some delegation usually takes place. They typically assign parts of a build to subcontractors who execute the completion of those parts accordingly. Just because a general contractor delegate does not mean that he is without responsibility. It is their job to overlook the complete scope of a project from legal compliances, safety protocol, to build quality.

With this amount of responsibility, comes an equal helping of liability on the part of the contractor. For this reason, many contractors carry contractor’s liability insurance and worker’s compensation in the instance of an on-site injury or incident. These different forms of insurance are put in place to ultimately protect you from legal action. The issue of having insurance is of such vital importance that most states won’t issue a contractor’s license if the minimum level of insurance is not met.

Subcontractors’ work is typically covered under their own insurance plans or the general contractor’s plan. No matter how they situate their arrangement, you can rest easy knowing that you have a substantial level of insurance coverage.

Hiring an Unlicensed and Uninsured Contractor

There are many things that can go wrong on a construction job site. You have workers working from rooftops, heavy equipment being operated and an array of power tools buzzing all around. Put simply, on construction sites it’s not a matter of “if” an incident will occur but “when”. This is where it is beneficial to have an insured contractor over an uninsured contractor.

If you DO hire an uninsured contractor, YOU effectively become the general contractor in the eyes of the law! That on-site powerline break is coming out of your pocket. The medical cost and worker’s compensation from a ladder fall is coming out of your pocket. Simply put, do yourself a favor and hire a reputable contractor who has all of their insurance bases covered. You will save time, money and stress in the long run.