In the 40 plus years that Dr. Vardi, a construction expert witness, has been involved in the construction and insurance industries the most common question is: “Do you have someone you can recommend?” Be it a contractor, subcontractor, material supply house, handyman, painter, plumber, electrician, etc. etc. etc. Who do you trust? Who will do the best job for a reasonable cost? The questions have never changed over the last four decades.
One of the biggest misconceptions by most homeowners and property owners occur when they see an advertisement by a contractor that they are licensed and bonded. In the State of California you need to be licensed to do any construction work with a value greater than $500. Essentially if you are going to do anything beyond normal maintenance you need to check the person’s license. It is easy. In California all you need is an internet connection to check out the person’s or company’s current standing at www.cslb.ca.gov. If you find any negative reports check that person or company more carefully before using them.
In California, every contractor must carry a license bond in the amount of $12,750. More on this issue later in this article. A contractor must also carry workers compensation insurance. There is an exception to this rule. If the contractor has no employees he/she can submit a statement to the board stating that they are “exempt” from this requirement. There is an exception to this exception. If the person or company is in the roofing industry they must carry workers compensation even if they do not have any employees.
So now that we have provided you that basic information on what is required by the contractor you must be feeling pretty good about going out and hiring one, right? “Not so fast,” says Dr. Vardi who has testified on this subject. Having met the basic requirement does not mean that you are protected. For instance, what if the project has a value of $100,000 how is a $12,500 bond going to protect you? How are you going to recover damages from a project that has gone sideways with all kinds of defective work? The short answer is to make sure that the contractor carries a general liability insurance policy sufficient to cover the project and that you, the client, is also named on that policy as an additional insured.
About a year ago Dr. Vardi considered installing an insert for the masonry fireplace in his home. After doing some research he found a local store that sold that insert. The store stated that they have a contractor who can install that insert. Dr. Vardi purchased the insert and paid in advance for the labor to have the insert installed. A couple of days before the installation was supposed to take place the contractor called to arrange an appointment. Dr. Vardi asked for his license number in order to check his status and asked the contractor to call him back. The contractor called back and Dr. Vardi asked him if he was planning to install the insert by himself since the house had a two story chimney. The contractor stated that he was planning to bring a helper. Dr. Vardi stated that since the contractors license board online information noted that the contractor did not have any workers compensation insurance he cannot have any others on the property and the contractor would have to install the insert by himself. The contractor cancelled the appointment and the store refunded the money for both the insert and labor.
When uninsured contractors work on your property you, the property owner, are taking a chance that could become costly. If a worker falls off a ladder and his employer, the contractor, does not have workers compensation insurance you may well become liable for that worker’s injuries. In an extreme case may even face criminal charges should the employee die of his/her injuries. One of Dr. Vardi’s clients is facing just that kind of a situation with Cal OSHA prosecuting the client due to a fatality that took place when a worker who was under the supervision of an unlicensed contractor tragically died after collapse of an excavation.
The following link will take you directly to some valuable advice provided by the California Contractor License Board: