Tales of woe
A NJ couple was successfully sued by their neighbor and condo association after having hired an uninsured contractor found on Craigslist to paint the exterior of their patio, and the contractor accidentally sprayed paint onto the neighboring properties and caused damage.
In one California case, Mendoza v. Brodeur, a homeowner asked his neighbor to do some work for him on
his home. But the neighbor got hurt on the job. The homeowner thought he was hiring an independent contractor who had his own insurance. The court rejected that reasoning, and found instead that the homeowner was the neighbor's employer and therefore should have had workers compensation coverage in place to cover the possibility of injury on the job. Because workers compensation wasn't there, the homeowner has to cover the costs personally.
Gambling with Uninsured Handyman and Contractor
One of the first principles of gambling is this: Never take a risk you can't afford to lose. Or, as Warren Buffett once said of an investment that went spectacularly wrong: "Never risk what you have and need for what you don't have and don't need."
Here’s a dirty little secret: If you don't hire a licensed and insured contractor to handle your project, you're the general contractor!
If your unlicensed contractor breaks a sewer line, you're responsible. If a worker gets hurt and can't work for two years, and there's no workers compensation coverage in place, you are on the hook for that workers' medical bills and lost wages.
The Lowest Bid May Mean Few Protections
When hiring a contractor, keep in mind that the cheapest bids can come at a cost.
It is often difficult for a contractor who is fully insured, has the quality protective gear, and adequately trains employees to compete against those who do not.
If you do take a low bid quote, verifying the insurance program becomes even more important in protecting your home or business from uncovered claims and lawsuits. The verification process is critical in trades in which the exposure to damage or injury is higher, such as roofing and framing.
There are even law firms that seek out uninsured contractors or handymen that have been hurt while working to help them claim Premises Liability against the homeowner. When homeowners hire uninsured workers — and the homeowners don’t take out workers’ compensation insurance or some other form of insurance to protect their workers — the homeowners might later find themselves being sued for workers’ compensation if an unlicensed or uninsured contractor gets hurt while working on their houses.
Small Jobs with Big-Time Consequences
Repairs for a leaky faucet or stuck door jamb will most likely never lead to a major liability claim, but not every job that a handyman undertakes is without potential risks. Making a simple mistake on basic plumbing projects such as a washing machine or dishwasher hose installation can lead to disastrous consequences. Water damage can run into the thousands. And face it, everyone makes mistakes now and again.
It’s not just major claims that need to be protected against. From spilled paint to smashing a client’s antique Chinese vase with your ladder, wouldn’t it be better to have someone else foot the bill when things go wrong?
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