The risk of hiring uninsured contractor may effect your financial future.
The insurance that covers a contractor may make them more expensive, but ultimately, it will protect you down the line if they are injured on the job.
In fact, contractors can’t even have a license to do the work unless they have the proper insurance coverage. So, not only are you sacrificing your finances but you’re likely also sacrificing quality work.
If a contractor is injured on your property, you can become involved in a complex lawsuit. They will be pushing for you to pay for their bills so they don’t lose any of their own income. A premises liability lawyer from Lytal, Reiter, Smith, Ivey & Fronrath can help protect you from this.
What insurance should a contractor have?
Contractors are business owners. Like any other business, they need insurance to protect against injuries that can happen on the job.
Generally speaking, there are three main forms of insurance that a contractor should have: workers compensation, general liability, and auto liability.
Workers Compensation
Workers compensation is the most important insurance for a contractor to have. This is the insurance that protects them against injury and will cover their medical bill and leave from work.
Hiring a contractor who does not have workers compensation can result in you paying for their medical bills indefinitely.
Since many construction injuries can have long-lasting impacts, the few dollars you saved on an uninsured contractor may lead to years of paying someone else’s medical bills.
Homeowners assume that contractors will be responsible for their own injuries, but that’s not the case. In most states, if the contractor doesn’t have workers compensation, the “prime contractor” is the one who must pay. Sometimes this is a project manager or supervisor. If they don’t have one, it can be the property owner.
General Liability
General liability insurance covers issues that may arise with products and their work. For example, if their work on your yard accidentally damages your neighbor’s property, this would cover the costs. If your contractor doesn’t have general liability insurance, you could be left paying for their mistake.
This insurance also covers the product they build after they have left. For example, if they build a deck that looks lovely for the first six months but then collapses and injures your guests, this insurance would cover the costs of fixing the damage, everyone’s medical bills, and the guests’ lawsuits.
Without general liability coverage, the property owner will be liable for all of these costs. Most homeowner’s insurance policies aren’t high enough to cover the costs of such an accident.
Auto Liability
Auto liability is the most commonly overlooked insurance that a contractor should have. Not every contractor will need this, but auto liability is useful if your contractor will be loading and unloading materials with their own vehicle.
Auto liability insurance covers any damage that may arise or any accidents from their truck on your property while they are working.
What are the risks of hiring an uninsured contractor?
Construction sites are high-risk areas. There’s a reason you have to wear proper protective gear. If you hire an individual who is unlicensed and uninsured, many things can go wrong. The risk of hiring uninsured contractor can include the following:
- Damage to neighboring properties
- Injuries to the individual
- Car accidents with their work vehicle
- Poor workmanship
- Injuries due to poor construction
- Breaks a sewer line or cuts electrical power
Remember, if the contractor is not insured, you as the property owner become the general contractor. That makes you responsible for all of their errors. If you hire an uninsured contractor knowingly, it’s likely that your insurance will refuse to cover any of the damages.
Don’t put your entire future at risk to save some money up front.
Will my homeowner’s insurance policy protect me?
Every homeowner’s insurance policy is different. To determine if your policy could protect you, you will need to ensure it includes all construction operations and subcontractors.
However, even if you have a homeowner’s policy that covers some contractor injuries or damage, it likely won’t cover it all. You will probably end up paying out of pocket and even having to lose the property that the contractor was injured working on.
Contact a premises liability lawyer for assistance
If you hired a contractor and they were injured on your property, you likely assume that it’s their responsibility to pay for their healthcare. However, if they’re uninsured, the onus is on you. Our team of West Palm Beach premises liability attorneys and Boca Raton premises liability attorneys can help you understand the risk of hiring uninsured contractor.
Our team of premises liability lawyers can help you determine if you’re actually liable for your contractor’s injuries. Contact Lytal, Reiter, Smith, Ivey & Fronrath to determine how to move forward. Unlike an unlicensed contractor, we are licensed, have years of experience, and don’t charge you until we win your case. There is no risk in hiring a premises liability lawyer to help protect your rights after hiring an uninsured contractor.
