The Importance of Hiring a Licensed Contractor

If the time has come to begin renovations around your home or business, securing a high-quality contractor or subcontractor is the first step in the process. Skilled professionals can remodel, redesign, and renovate your home, restoring and improving the original structure. If you choose to DIY your project, a licensed subcontractor can step in to complete the tasks that require a specialized skill set. Hiring a qualified contractor can mean the difference between a lasting, well-done project and years of repair bills and reconstruction.

But not all contractors are created equal. A highly-vetted and licensed professional with specialized skills provides insured work with the credentials to match. Contractor and subcontractor requirements vary by state, and in some instances an unlicensed contractor may be breaking the law or-at best-lack the training and oversight required to complete your project to the highest standard. Understanding the difference between a licensed and non-licensed contractor is vital when making choices about your construction project.

Licensed contractors and subcontractors are businesses with professional credentials validating their skills, work ethic, and technical prowess. Such companies have invested time and money to secure authorization from appropriate local, state and federal oversight entities and must continuously meet required standards of quality, safety and continuing education. Their ongoing licensure supports an understanding and adherence to legal compliance and industry standards.

John, a longtime subcontractor in the restoration industry, understands that being licensed and working with other licensed contractors is important because he understands that in order to continue to get work from restoration companies like BluSky Restoration Contractors, he needs to hire licensed subcontractors and follow their code of ethics. "Unlicensed contractors operate without adhering to the law and local codes. This may cause all kinds of headaches for the property owners because the work might have to be demolished or worse yet, the structure might collapse and hurt people. The owners might save a bit of money upfront, but it can be very expensive for the home and business owners," warns John.

"Engaging a licensed contractor or subcontractor for your project ensures your job will be done by professionals who understand the zoning, permit and other legal requirements. You'll mitigate the risk of hiring an unqualified craftsman and reduce the stress that comes with concern over a job not-so-well done," comments Mike Erekson, Chief Operating Officer for BluSky, a leader in the restoration and roofing industry. Beyond the moral, ethical and legal importance of hiring licensed contractors, there are many benefits to retaining a professional with local and state licenses.

Licensed Contractors Are Bonded

In terms of construction and restoration work, a bond is a licensed agreement between a company and an insurance provider which guarantees the completion of your project. If a subcontractor fails to complete your project as agreed, you are eligible for financial compensation for your troubles. A bonded and insured contractor will protect you against mishaps or incomplete work which doesn't live up to the stated terms.

Licensed Contractors Have Workers Compensation

If an employee, subcontractor or other worker is injured on your premises, it is the job of the licensed contractor to care for them with workers compensation. This protects you against medical expenses and lawsuits that may result when someone is injured on your property. Any lost wages will be compensated by the company, not your direct income.

Licensed Contractors Have Liability Insurance

Liability insurance serves to protect you and your home or property from unnecessary damage. If a contractor pursues an action that causes damage to your home, the liability insurance policy will pay out to repair the affected area. Not all contractors carry both workers compensation and liability insurance. Ask questions and get confirmation of insurance before proceeding with a contract.

The Dangers of an Unlicensed Subcontractor

Many homeowners choose to work with unlicensed contractors to save money. An unlicensed subcontractor may entice clients with the promise of a reduced or discounted rate.  These rates rarely stay low, however, as unlicensed work can result in diminished quality and future repairs. On occasion, an unlicensed contractor may have ulterior motives, and without the oversight of licensure, finding recourse when you've been scammed can be much more challenging.

Without the security of the appropriate bonds, licenses and insurances, unlicensed subcontractors could potentially harm your property or leave you with an unfinished project.

• Un-bonded contractors could refuse to finish work as agreed and disappear without completing your paid-for project.

• Subcontractors who do not carry workers compensation leave you open to potential lawsuits and high medical bills.

• If your home is damaged without liability insurance, it will be left to you to cover the cost.

How To Spot An Unlicensed Subcontractor

Trade workers operating as unlicensed contractors rarely let on regarding their uncertified status. It is increasingly important to vet all contractors you plan on hiring. The following is a list of best practices identifying any potential red flags:

• Perform an online search for the contractor's license through your state's licensing authority. Some companies list their licensing verification on their website or social media, and they may even display a seal at the bottom of their website. Proceed with caution and confirm licensure with state and local licensing entities to ensure a company is representing itself honestly.  

• Search online reviews and research any past legal matters you find. Reviews can reveal a company's reputation as well as the way in which it resolves any client concerns. 

• Review your contractor or subcontractor's proof of licensure, insurance and bonding to ensure they're representing themselves honestly and have protections in place for your project.

If a contractor fails to answer your questions or refuses to follow up after an initial consultation, continue your search until you've found the best fit for your needs. Perform your due diligence and consider the reputation, communication and credentials of the group you choose. Your construction, renovation and restoration projects are worth the invested time to engage a licensed contractor who will provide a complete, quality result.