The Risks of Hiring an Unlicensed Contractor to do Work in Your Home

When comparing prices of contractors in your area, it may be tempting to go with the cheaper, unlicensed one rather than dish out the higher fees for one that is licensed, bonded, and insured. While the savings are probably considerable, it’s never a good idea to hire such a contractor. Should something go wrong, you could be in for a world of trouble. Here’s why.

Why Hiring a Licensed Contractor is Wise

When it comes to hiring a contractor to do work in or around your home, you want one who’s licensed. Why? Because said license says he is legal to work in your state and has had the necessary training to meet industry standards. 

Anytime you do work on your home, it must meet building codes with the proper permits. Should an unlicensed contractor fail to meet these requirements, you may be on the line for making the repairs to meet them. Also, should an insurance claim result because of the shoddy work, your homeowner’s insurance may not cover it because it was the fault of an unlicensed contractor. 

Let’s Talk Insurance

Any contractor you hire should carry two types of insurance: liability and worker’s compensation. Liability insurance protects you by covering any damage caused by the contractor. Worker’s compensation insurance also protects you by covering any injuries received by a contractor while on your property. 

Don’t make the mistake of thinking your homeowner’s insurance will cover these things if you hire an uninsured contractor. It won’t. 

The Importance of Hiring a Bonded Contractor

Many people make the mistake of thinking that bonding is insurance. This is incorrect. Bonding only ensures that the contractor will do the work as he or she is supposed to. It is a secured money set aside that covers loss in the case that the contractor fails to perform the work correctly. 

For example, if your plumbing contractor fails to perform a pipe repair correctly and a leak causes damage to your home, it would be covered if the said contractor was bonded. 

While it’s tempting to hire the cheapest contractor you can find to save money, it’s wise to make sure the contractor you hire is licensed, bonded, and insured. Yes, you’ll likely pay more for a licensed contractor as their fees are usually higher, but look at it this way: if the contractor is willing to cut corners on these important requirements, what else are they cutting corners on? 

Think about that the next time you’re in the market for a contractor and make the smart choice.