You might be thinking, but my friend does great work, he just doesn’t to pay all those extra costs like workers compensation Insurance, liability insurance, or bonds to protect their work. But that’s the problem, without these insurances and protections, homeowners and business owners are at risk. Here’s why:
· Third Party Liability: Just like in the case of on-the-job injuries, you become responsible for any problems or damage incurred by your unlicensed contractor that may occur during the construction process. For example, let’s say your unlicensed contractor is building an awning and is negligent in his work and smashes a neighbor’s window, drops a hammer on his car, or accidently conducts some other random act of mayhem; well guess what, you’re now responsible for the costs associated with repairing the damage.
· Property Value Protection: This is something you should truly keep in mind. You want to be sure that your construction project adds value to your home and doesn’t take away from it or cause you problems down the road. So what does that mean? Let’s say you used an unlicensed contractor and he/she didn’t apply for the right permits, didn’t keep up to code with the project, and the right paperwork wasn’t filed with your city, well guess what? You’re now liable for any work that has to be re-done and your property value can be affected.
· Knowledge & Experience: When you hire an unlicensed contractor, that means he/she may not have the experience a licensed one does. For example, a licensed contractor is required to participate in arbitration hearings if there is a dispute, according to the Better Business Bureau. Also, a licensed contractor has knowledge and experience that he’s studied for and obtained his credentials with.
As you can see, the risks and costs that you become liable for when hiring an unlicensed contractor are very high. Why risk paying thousands more and possible penalties or fees? Hiring a licensed contractor gives you peace of mind and the knowledge that your project is being handled by a professional.