FEATURE OF THE MONTH - JANUARY 2012

Risky Business??

Somebody cuts off a finger. Another guy falls off a ladder and breaks his leg. Sounds pretty gruesome, but it does happen and it could happen in your house, if you were foolish enough to hire an uninsured contractor.

In the next few paragraphs, we’ll highlight some facts you may have been unaware of and suggest ways to guard yourself or your business from lawsuits and other situations out of your control.

Horror Stories

There is no shortage of scary tales when it comes to accidents at construction sites. In fact, according to the Better Business Bureau, “except for auto repair shops and car dealerships, no other industry has generated as many complaints”. Most of these incidents involve shoddy workmanship and disappearance of the crew mid-project, but injuries are right up there, too. As a matter of fact, a poorly done job is probably a better scenario than an injury for the homeowner. You can quickly remedy shoddy work, for a price, that is. But an accidental injury on your job site could involve months to years of litigation, payments for medical expenses and loss-of-work payments…if this injury involves an uninsured contractor.

Put the Odds on Your Side

Beware of the following situations if you want to decrease the odds of being sued or suffer loss of time or quality on your project:

• Unsolicited phone calls or visits - Some very reputable companies do market this way, but scams perpetrated on the public have become almost legendary and often begin on your front stoop with an offer of a “great price”. These scam artists often target the elderly and may even use scare tactics to get people to hire them to fix perfectly good structures in or around their home.
  
• Large down payments - It may be a sign that your contractor is going to take the money and run. 
• Poor quality work - Not all poor quality work is done by unlicensed or uninsured contractors but, because unlicensed workers are not subject to specific standards, they are often less experienced and poorly trained and often unqualified to do the job at all. 
• No coverage under homeowner's policy - Some homeowners believe it is safe to use an uninsured contractor, assuming that any damages incurred would be covered under their own insurance policies. However, this isn't the case. Most homeowner policies require that licensed contractors do any work to the property; coverage is often specifically excluded for damages caused by "bootleg" contractors. 
• Broken contracts - If you have a dispute with a licensed contractor, you have recourse…you can call his or her licensing agency. At the very least, the licensing agency has the authority to suspend or revoke a dishonest contractor's license. While this doesn't necessarily ensure a contractor will play fair, it gives him or her considerably more incentive to do so.

These regulatory authorities, however, cannot take this sort of action against unlicensed contractors. Therefore, homeowners often find that their only recourse is a civil lawsuit. And because many unlicensed contractors go in and out of business readily, such a lawsuit is frequently a waste of time and money. Consumers in some states do not even have this option - in areas where licensing is required, contracts with unlicensed contractors may be legally unenforceable.

Your Best Bet

Familiarize yourself with licensing requirements for contractors.

• Be sure to verify your contractor’s license and insurance information. 
• Check if your contractor holds a membership with an association. For a hardwood flooring contractor, being a member of the National Hardwood Flooring Association would assure you that your contractor would abide by the standards of the organization, and also, most likely attend the yearly conventions where he/she gets educated on new techniques used in the industry. 
• Call the Better Business Bureau or Consumer Affairs Bureau to see if anyone has complained about your contractor. 
• DO NOT HIRE UNLICENSED OR UNINSURED CONTRACTORS!