Greetings to all!
I’m doing my first large renovation project, and it’s now time to hire an electrician and a plumber. I’ve interviewed several candidates for each, and have been faxed the insurance papers from those I’m interested in hiring. As a rule, these guys run small independent companies with less than 3 employees – so in my state (NC) they’re not required to have workers comp (as I understand it). What happens if one of their staff gets hurt on my property?
My hunch is that, if they can find blame with me or my property, then they (or their family members, “guided” by some attorney) will come after me. Right? This house is 80+ years old, and is the poster child for “remuddling”. It’s a mess. The electrical is a mixture of old and new, with some knob and tube and fuses that are still hot. To be sure, a good electrician knows how to handle this sort of situation; nonetheless, accidents happen.
To top it off, the electrician that I’m most interested in doesn’t seem to have injury insurance from the insurance company he directed me to. Maybe he’s covered under a personal health insurance policy, but some of the other contractor’s paperwork seems to indicate that they have coverage for personal injury under their work insurance. After his insurance agency faxed me his papers, I called them up to confirm what the forms seemed to suggest; yes, he’s not covered for personal injury. What should I do in this case?
It’s probably clear that I’m new to this sort of thing. I’m trying to find out what most other renovators do when hiring small (but reputable) contractors. Any advice is much appreciated.
Thanks!
Replies
I never "hire" any contractors. I let the homeowner hire them. I am a one man show and do small renovations. I tell the homeowner that I have an electrician and plumber that I reccomend they use. It is always the same two guys. I explain to the homeowner that they are hiring the electrician and plumber and that they are responsible for paying them. The guys I use prefer it this way. I guess they have been burned too many times by GC's not paying them on a timely manner.
Coming to you from beautiful Richmond, Va.
But to the question here which is not about getting paid - do you inform the HO that while they save money, they are also buying the liabilities that might end up in their laps? Full disclosure kind of thing...
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I re-read the post, I guess I got sidetracked.Coming to you from beautiful Richmond, Va.
Hi Frank.
It is not clear to me if you are a GC starting out or a HO. Since this is your property, I kind of assume HO acting as GC. The exact nature of your position effects the answer.
Short version is that you should consult an atty in your state.
I have aorked in four or five states as a sub and as a contractor. In every one of them, any employee of mine would have a right to be made whole if he were injured while in my employ. If I disappeared or had no means to compensate him from my own funds or via WC insurance, they would then go to the ultimate responsible party - the homeowner.
Here in Maine, a single "Artisan" contractor with no employees can legally avoid having a WC policy on himself, and some of my subs( I am a GC) do not carry their own WC policy. I do however cover them with my policy and include the cost in my fees. In my mind, I would be foolish and negligent to do otherwise. I serve clients with net values in the stratosphere ( deep pockets) so if someone I brought in to work theree got maimed or killed, I am sure that his family and lawyers would be digging as deep in those pockets as they could mine them.
An individual artisan contrator who works directly for the HO can be denied that right.
I don't know what the details are in your state, which is why i starteed out recommending a lawyer there. Do NOT go by what you might be told by other HOs or GCs. I have heard all manner of mythological information on the subject in various states, most of it wrong andf baseed on wishful thinking.
I think that if you are contracting with subs, you should stipulate what insurance they carry to protect you or that you should at least get a rider on your HO insurance. I believe that most companies can sell such a rider on a single short term situation for a home you are living in for much less than the actual cost for WC if the contractors charged more to cover t it. But if you are say, rebuilding a home on spec to sell, that is a GC pro situation that calls for you to belly up to the commercial desk at the insurance agency.
Welcome to the
Taunton University of Knowledge FHB Campus at Breaktime.
where ...
Excellence is its own reward!
A big THANKS to all who have responded, especially "piffin"!
Sorry, I didn't make it clear that I am a homeowner (HO), not a GC.
>> Short version is that you should consult an atty in your state. <<
Absolutely. But it's also wise to do some homework before sitting down with a lawyer.
>> Do NOT go by what you might be told by other HOs or GCs. I have heard all manner of mythological information on the subject in various states, most of it wrong andf baseed on wishful thinking. <<
You are SO right! When I ask 3 questions, I get 4 answers. Seems alot of folks choose to ignore the issue and hope for the best. Other folks assume that their home insurance will cover them, but when you press them as to whether their home insurance covers investment properties then they tend to be less sure of themselves.
>> ...or that you should at least get a rider on your HO insurance <<
I asked my agent about this and it turns out that indeed I'm actually covered to some extent already.
>> An individual artisan contrator who works directly for the HO can be denied that right. <<
Could you elaborate on this? I was watching a HomeTime video once (uh oh!), and they mentioned something to the effect of having workers not covered by workers comp sign a note saying that they understand that they are working as an independent contractor - NOT as an employee. Is this what you're talking about?
Again, Thanks!
Frank, Piffin was right on. Check with a lawyer. Conversely, I am doing a large job ( for me) where the homeowner is paying several of the subs directly although my contract stipulates that I will suprivise and coordinate and in most cases select and hire most of the subs although their contract (sometimes verbal) is with the HO. This prevents me from having a small sub w/o WC fall under my WC policy. >I use several 1 man shows and a couple of them do not have comp. My lawyer recently advised me that if the $hit hit the fan an injured party might be able to come after me or my WC policy even though I am not writing their checks because there is not a written contract between the sub and homeowner. I am loath to give up my smaller subs because they are top notch craftsmen and will work around a very cut up and complex job on an hourly basis that a larger sub would highball an estimate on and not provide the flexibility that I need. I do a lot of Historic work where the scope is unclear and larger suds don't fit the bill. > My lawyer also said that the homeowner was open to liability because of the vaguness of the arrangement. We are now all working towards an arrangement where everybody is protected. The only certainty in this whole situation is that WC, insurance and lawyers are a neccasary albeit expensive reality that you hope you never need. Jay
That little glitch is one reason why Maine is instituting this "pre-qualified" certification as Artisans. once they establish with the state that they do maiontain a business entity, the liability is established as a normal function of their business.
Prove it now or prove it later...so I'm encouraging my guys to get recognized. It doesn't cost but the paperwork.
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">> An individual artisan contrator who works directly for the HO can be denied that right. <<Could you elaborate on this? I was watching a HomeTime video once (uh oh!), and they mentioned something to the effect of having workers not covered by workers comp sign a note saying that they understand that they are working as an independent contractor - NOT as an employee. Is this what you're talking about?"________I was in context of this state I am in
I don't know where the TV show was happening, but that still sounds like some rehashed mythological repitition that never originated in a legaloffice.One principle of law is that a person cannot sign any agreement to do something the law has preinvalidated. I suppose there are times when a person can waive his rights under the law in an agreement...But overall, the idea is probably that of clarifying the position that person is in, whether an employee of yours, or an independent contractor with a bonafide business practice of their own. But in your case, these guys in question are not working for you. It is the subcontractor who writes thema check. It is he who brought them onto the job. it is he who directs their activities. They only work for him. You wouldn't know they exist if he had not brought them into the house.
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