What it means to be licensed and insured

What does it mean to be licensed and insured?  Any contractor you hire to work in your home should have a contractor’s license and carry insurance – both general liability and worker’s compensation.  This is intended to protect the homeowner, but most homeowners don’t recognize the true meaning and importance of being licensed and insured so we are going to explain it. 

In Illinois, only roofing contractors, electricians and plumbers are required to have a license.  A general contractor does not need to obtain a license or pass any exam.   However, having a license sets a contractor apart from those that don’t.  Generally if a contractor doesn’t make the effort to get a license there is a good chance that they won’t take the time to get insurance.  Possessing the correct licensing tells the homeowner that the contractor takes his work seriously and that he has the ability and knowledge to perform a quality job. 

Another essential aspect to think about when hiring a contractor is not only that they are insured, but the type of insurance that they carry.  Did you now that sometimes contractor’s advertise that they have insurance when in fact their work truck is all that is insured?  Having the proper insurance is a large expense, but a quality contractor will spend the money – it protects the homeowner.  The minimum amount of insurance a contractor should have is general liability.  Liability insurance protects the homeowner from property damage.  If there is damage done to the home due to the contractor’s negligence it will not be covered by homeowner’s insurance.  If you hire an electrician without liability insurance and a bad wiring job causes a house fire your homeowner’s insurance WILL NOT cover the damage, it is the contractor’s general liability insurance that would cover any damage to the home. 

There is also worker’s compensation insurance which is so important and many contractors don’t have this type of insurance because it is expensive and not required.  Workers compensation protects the homeowners from liability if a worker is injured in their home.  Did you know that if a worker is injured in your home and the contractor doesn’t have workers comp the homeowner could be held responsible for medical costs and lost wages?   If that happens, you better hope it is covered by your homeowner’s insurance or the out of pocket cost could be astronomical.

Whenever you hire a contractor you should ask to see a copy of a current license and certificates of insurance.  A good contractor will be happy to provide this information.  They have gone out of their way to insure your safety and as a professional they want to show their client’s that they have the skills and knowledge to perform high quality work. 

Cyndi - www.redcarpetconstruction.com