No Contractor License? No Liability Insurance? No Thank You!

When it comes time to
hire a contractor or begin a project, it’s important to make sure that they have
all their paperwork fully completed for them to legally and safely
proceed.  A common secret among low
quality builders is to try and cut costs to boost profits by skimping on liability
insurance or forgoing a contractor license. 
Below you’ll find out how to verify that these have been taken care of
properly.

Georgia
Contractor License

In the
State of Georgia, it is not only required by law that a builder be licensed,
but that they also display their license in the place of business and carry a
pocket license with them at all times. It only
costs about $200 for a contractor license; yet fly-by-night contractors can’t
even scrape together $200 to make themselves legitimate. Anyone
can say they are licensed, so it is important to make the contractor prove it by
either showing you the license or giving you a copy of it. Remember to check
the expiration date, as some contractors use expired licenses. If a contractor cannot
produce a valid license, don’t hire him!
If you have any questions or doubts, contact the Georgia State Licensing Board for Residential and General Contractors

The purpose
of General Liability Insurance is  to “protect
business owners from a wide variety of liability exposures, including liability
arising from accidents resulting from the insured’s premises or operations,
products sold by the insured, operations completed by the insured, and
contractual liability.”  In layman speak,
consider this example: your remodeler hires a roofer whose ladder slips and
falls causing a broken leg and other health problems, and the roofer is blaming
his injuries on the deck for being too slippery because of dust and debris.  This type of insurance would compensate the
sub-contractor so the builder, or in the unfortunate event the builder cannot
cover the cost, the homeowner wouldn’t be held financially responsible.  Workers Compensation does the same thing for
employees of the remodeler versus hired contractors in this example.

Not only is it a good business practice to have necessary liability coverage
in the event of an accident, but it’s also required as a part of the Contractor
License.  Depending on the type of
license held, a minimum level of $300,000 to $500,000 is required to hold a
valid contractor license.

Just as a sneaky contractor may try to pull a fast one on you by showing
an expired license, watch out for the same situation with lapsed insurance
coverage that they may have been neglecting to pay to save some cash.  Since anyone can say they are insured, make the contractor prove it by
having their insurance company provide a certificate of insurance with you as
the homeowner named as the certificate holder.

There is one exception: if the remodeler
is a one-man operation, he can be exempt from having to carry workers’
compensation insurance. If he is doing so legally, he can provide you with a
copy of his Construction Industry Certificate of Exemption from Workers’
Compensation. This still puts you at risk, because if he shows up one day with
an unannounced helper and the helper gets hurt, with no workers’ compensation
insurance, you may be held financially responsible for the medical bills. Similarly,
if the uninsured contractor is sloppy about verifying his sub-contractor’s
workers’ compensation insurance and the sub-contractor gets hurt, again you may
be held liable for the bills. In short, it is much safer to deal with a fully insured
contractor.