My Turn: Uninsured contractors are catastrophe waiting to happen
Who should pay for last year’s sewage spill into Lake Tahoe? A valuable lesson to homeowners. As another busy construction season is upon us in the beautiful Tahoe area some lessons can be learned from the accidental sewage spill into Lake Tahoe last year.The following was copied from the State of California Contract License Board, or CSLB. Make sure the contractor has Workers Compensation and liability Insurance Coverage. Ask the contractor and verify on CSLB’s Web site http://www.cslb.ca.gov if the company is insured against claims covering workers’ compensation, property damage, and personal liability in case of accidents. Ask to see a copy of the certificate of insurance, or ask for the name of the contractor’s insurance carrier and agency to verify that the contractor has the insurance.Licensed contractors are not required to carry general liability insurance, however, they must include in the written contract a form about liability insurance. The form includes five questions about general liability insurance you should ask your contractor and the answers you should get.Home improvement contractors must tell you whether or not they carry general liability insurance and that it will protect against third-party bodily injury and property damage. If uninsured, they should be able to explain how they would cover losses that would ordinarily be covered by insurance.If your contractor damages your property and doesn’t carry general liability insurance, you or your insurance policy could end up paying for damages.If the contractor, Pacific Built, in this case did have a valid and large enough liability insurance policy, then the insurance underwriter should pay the fine and clean-up costs, unless the policy stated that things such as fines were not considered coverage as part of the policy.For the many licensed and properly insured contractors in this area having the appropriate coverage and documents is standard business practice and ultimately protects the homeowner from unnecessary liability and legal costs.If homeowners do not hire licensed and properly insured contractors, then they are ultimately responsible for any liability or damage incurred in regards to their construction needs.The State of California has a Web site for homeowners to determine if a contractor who may be submitting a contract/proposal to work on their home is holding a valid contractors license and is properly insured. The site is http://www.cslb.ca.gov. Anyone contracting with an unlicensed contractor may be saving some money in the short term, sometimes up to half or more of the costs associated with hiring a licensed contractor, but if a catastrophe like the sewage spill into Lake Tahoe, or worse, such as a death, happens on their property, then the legal fees alone to defend their involvement would far exceed the costs of hiring a licensed contractor.There are some estimates that up to 55 percent of home improvement work in the Tahoe-Truckee area is being done by unlicensed and improperly insured so-called contractors. Be smart and protect the investment of your beautiful and valuable Tahoe-area property. Hire only licensed contractors.Dan Hikel is a Truckee resident and owner and operator of Artisan Fine Finishes, a painting and decorative finishing business.
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