Hiring a contractor - insurance issue

[MiamiCuse]

I am currently negotiating a contract with a contractor who is highly recommended by a friend. While we work out the terms of the contract I had a clause in it that states:

"Contractor warrants it is adequately insured for injury to it's employees, subcontractors and others incurring loss or injury as a result of the acts of Contractor or it's employees and subcontractors."

He strikes out the line above and replaced it with:

"Laborers brought on site by Contractor are not insured by Contractor. Additionally other Subcontractors brought on site are not insured by Contractor."

Is this a disaster waiting to happen? I want to make sure he only use subs that are properly insured for injury, and he is saying he does not care.

Am I demanding too much? I don't think so. I don't want him to hire a laborer off the street who then comes here and let a hammer fall on his toe then turn around and sue me for $50,000.00 to cover his pain and suffering.

Any suggestions?

MC

[Joe]

Get the expert advice you need from a local lawyer in your area. He can tell you exactly the extent of your liability, if any. Additionally, he may even be able to supply a EULA for your contractor to sign specifically absolving you of any and all consequences. Might cost you a few bucks, but like the Mastercard ad says, it could be priceless later. HTH

Joe

[Steve B]

You don't think a guy who would first take the time to alter a contract and enter a clause stating that he's not providing insurance for any of his workers on your property would sue you later, do you?

And besides, it's not him you have to worry about. It's every alien,alcoholic, derelict and fugitive that he brings to your property who will sue your pants off, not him.

That's who you end up having work for you when you don't even provide worker's comp as an employer, and pay in cash day to day.

And that's not even considering those workers visually and mentally taking notes about your valuables and your workaday routine while working on your property. Only to return some day when you're not home and do a little "side work".

Let me give you a quick intelligence test: Here's fifty gallons of gas. Here's a Bic lighter. What could possibly go wrong?

Steve

[Edwin Pawlowski]

If they are independent contractors themselves, he does not have to cover them. He only has to cover his employees. I don't know about your state, but some only if you have a certain number of employees, like 3 or 5 or more.

This is how the contractor avoids the high cost of workman's comp insurance. Now, it is possible that each individual worker makes enough money that they provide their own insurance. Yes it is possible.

[<josh]

This is true, but the homeowner can be liable for injuries to the subs if they are injured and do not have worker&#39;s comp insurance.

If the GC does not provide the worker&#39;s comp for the subs, he should at the very least be required to obtain proof of their insurance before allowing them on the jobsite.

[Richard J Kinch]

You are demanding the wrong thing.

Simply get a certificate of insurance (general liability and workers comp) from the contractor.

If he can&#39;t deliver that, then he&#39;s not insured.

If he&#39;s insured, he will have absolutely no problem in giving you a certificate.

End of story.

[Tony Hwang]

Hmmm, Here in Canada there is Work Mens compensation board run insurance. Every employer/employee are covered for minimal annual premium depending on job classification. If home owner wants extra coverage for unexpected accdent, he can buy a coverage for the duration of a job for nominal premium. If a contractor does not have WCB coverage, very seldom he can work on anything. I think most accident occurs on roofing jobs.

[Frank]

I don&#39;t know what I&#39;d do with this guy but on advice of lawyer sons, I&#39;ve increased my homeowners and car insurance liabilities to high levels. There are a lot of suit happy people out there that look for opportunities to win the lottery from people like us. Sons also recommend getting proof of insurance from contractors.

Frank

[trader4]

Agreed. Even if the contractor accepted the original clause, it ain&#39;t worth much. Suppose it turns out he doesn&#39;t actually have insurance after someone has a $50K accident? Then what? When you&#39;re sued are you gonna the sue him and chase him down? Many of these guys are judgement proof. But the injured worker knows where your house is.

You want proof in the form of an insurance certificate.

[Steve B]

Steve

[MiamiCuse]

I don&#39;t think it&#39;s my luck. I think it is reflective of the percentage of tradesman that are unlicensed, uninsured, unskilled, and uninspired in this part of the country (south Florida). When Wilma hit us, literally thousands and thousands of roofers went around and knock on doors of the older retired population with roof damages and asked for 50% down on doing their roof repairs, proceeded to cash the check and never showed up at all.

It just THAT hard to find an honest, skillful and licensed contractor. Yes, you ask friends, coworkers, neighbors, everyone and 10 out of 10 told me they will not hire who they previously hired. Why did they hire them to begin with and why didn&#39;t they check references? Because they couldn&#39;t find anyone else.

Last eight projects I had hired someone to do, only one was professionally done, and that was a hurricane shuuter installation. Between the time I paid the retainer, to the time they show up for the install, nine months elapsed. That&#39;s how busy they were.

MC

[<josh]

Just to be careful, you should also take the two minutes it takes to call the agency listed on the certificate and verify that coverage us current. Some crooked contractors play the game of doctoring past insurance certificates for new jobs, not hard to do with today&#39;s scanners and software.

Speak to their insurance agent and confirm that the coverage is in place for your specific job.

[MiamiCuse]

Thanks. I will do that.

MC

[Oren]

Reminds me (DIY) check your home owner&#39;s insurance.

Our state has a web site to check contractors.

Crooks have been chasing disasters in Florida for many years and they travel light, taking money and running. Even building inspectors were on the take and indicted after Andrew.

-- Oren

"If things get any worse, I&#39;ll have to ask you to stop helping me."

[Richard J Kinch]

No. You don&#39;t know what a "certificate of insurance" is and how it works. It obviously would not certify *anything* if it could be cancelled without your knowledge.

[Richard J Kinch]

Do not mistake the predominance of dishonest, unskillful, and/or unlicensed contractors as an absence of good ones. The cheap stuff is piled high out on the floor, the good stuff is behind the counter on a high shelf.

Actually, in Florida, there are *no* unlicensed contractors, because by law, contracts for unlicensed work are unenforceable. So go ahead and hire them, just don&#39;t pay in advance, and then you won&#39;t have to pay at all.

[mm]

Huh? My auto insurance can be cancelled without anyone knowing, except me, if I get the letter. Now in this state they notify the DMV, but how would anyone borrowing my car know if my insurance had been cancelled?

And how could a client know if contractor&#39;s insurance was cancelled?

Do you mean that no one would lie?

[Richard J Kinch]

No, not if a certificate has been issued. Learn what a "certificate of insurance" means. It is not just a policy declaration.

[Oren]

I might at least, ask my insurance agent for my home policy. He may be able to assist with an insurance validation.

-- Oren

"If things get any worse, I&#39;ll have to ask you to stop helping me."

[<josh]

I know a bit about them, since I issue them.

If it has in fact been issued by the carrier, then the carrier will attempt to provide notice if it is cancelled.

If the carrier knows nothing about the certificate because it was doctored up by the contractor&#39;s teenage son, then you will never receive a cancellation notice because the coverage never existed to begin with.