Are There Risks to Hiring an Uninsured Contractor to Work on Your Home?

September, 2018

Are There Risks to Hiring an Uninsured Contractor to Work on Your Home?

Painting New Hampshire

You bet there are.

When a homeowner hires a company or person that does not have insurance, that homeowner is effectively operating as the general contractor, and could be liable for any damages or injuries. And a standard homeowner’s insurance policy may not offer adequate coverage, or may not apply at all in the event of an accident. It could be a pretty big gamble. Please click on the following links to learn more about the risks. Some of the examples cited by these industry experts are downright scary.

Running any business for over 40 years is challenging, and a painting business is no exception. As with any legal, professional business, a painting company has a fair amount of expenses. These expenses include having the proper insurance coverages for both liability and worker’s compensation.

Know the risks of hiring an uninsured contractor. – Colby Insurance Group
3 risks of hiring contractors without general liability and workers comp. – Beacon Insurance Advisors
The danger of using unlicensed and uninsured contractors. – All Property Management
Interior Painting and Staining

A contractor that operates a business without insurance is trying to save money. And if they don’t pay for insurance they can charge less for their work, and may be able to win price-competitive bids. Be aware of that when you get estimates for services for your home. The estimates may not truly reflect comparable services or protection. Make sure that you know what you are getting when you hire a contractor.

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Two years ago I was in a car accident. It was clearly the other driver’s fault, and she took full responsibility. However, I soon learned that she did not have insurance. So, in many ways this is similar to a homeowner who hires a contractor without insurance.

Since she had no insurance, I was responsible for the repairs for my car. Nobody was injured, but if there were any medical bills, I would have been responsible for them as well. Fortunately, my “uninsured motorist” coverage took care of my damages, which added up quickly. Your homeowner’s insurance may not be as helpful as your uninsured motorist insurance if an accident occurs. Understand that it may not be exactly the same, and either way, you are responsible for damages or injuries.

You may be able to recover some of the costs through the court system, but how long is that road? Winning a judgement might be easy, but getting any money back is another matter. A driver without insurance probably doesn’t have any money, and a contractor without insurance will probably go out of business and file for bankruptcy.