A few weeks ago, a very distraught friend of mine was standing at my doorstep asking for some advice. Tom seemed to be in a difficult situation involving another contractor who was doing some work at his home.
He related to me a series of bad events that had happened to him and his wife in the previous few days. Let me start by mentioning, Tom and his wife are recently retired, good, honest, hard working blue-collar people. In retirement the most valuable thing they have is their house (which is paid off). Tom decided he would do something nice for his wife by remodeling their kitchen and other small upgrades in the 40-year-old house.
Tom acquired only one estimate and signed a $23,000 contract to have the work done. After a few days, all seemed to be going well on the project. However, while the contractor’s employees were busy at their craft, one worker started spraying lacquer finish to the cabinets in the kitchen. This worker was unaware that older model ovens, such as the one in Tom’s kitchen, can have a live pilot light. Lacquer fumes soon hit the pilot light, and BAM!, the kitchen exploded! Other workers were able to quickly extinguish the fire in the kitchen to keep the damage down to a minimum, however, the worker spraying the lacquer was badly burned and spent a week in the burn unit. When Tom visited the worker in the hospital he was informed that the contractor had told the hospital he does not “carry worker compensation insurance”.
So my friend Tom is now standing at my door, having paid the contractor $11,000 of the $23,000 contract (with the job about 1/4 completed) now he has a fire damaged kitchen (of course the contractor does not carry “general liability”) and a badly burned worker that will most likely sue Tom and his wife. The contractor told Tom that he is not required to carry worker comp insurance because all of his workers are independent contractors.
The first thing that came to my mind is the many times I have sat in front of homeowners and told them that they need to verify that all the contractors they are considering for hire do indeed abide by state laws. It is imperative for your protection and theirs that every contractor have workers’ comp coverage for all employees and general liability insurance for all sub-contractors. Unfortunately Tom never asked me. I don’t know how this will shake out for Tom and his wife, but it is very likely that the injured worker will name them in a lawsuit for his damages.
Had Tom verified first that the contractor he hired was legitimate and fully insured, the contractor’s insurance companies would be taking care of the liabilities in this case, rather than Tom who’s now standing at my door wondering if his wife’s new kitchen will cost them their house in future law suits.
We have at the licenses we need to handle any type of roofing for your home or investment property. We cover our crews with workers’ compensation in case of an incident.
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