Conference 7.286::home_work

    When talking with a contractor about building a deck, what sorts
    of questions should I ask about insurance, workman's comp, etc,
    warranty, etc?
    
    Should someone get hurt on the premises while working on a contract
    job, what sort of language should be in the contract to protect
    me?
    
    Thanks,
    	Rob
    

    just ask him if he's bonded and fully insured.he should have certifi
    cates to back his policy for customers.

    If you livein New Hampshire, all homeowner policies have a provision
    that covers the policyholders for claims by contractors employed
    on the property.  State law.
    
    pbm
    

    Does the homeowner need to worry about workmen's compensation
    insurance, when hiring a contractor, or is that the contractor's
    responsibility?
    
       Gary

         I can't remember the source of this info, but a contractor
         should provide you with some sort of certificate that proves
         he is carrying insurance.  In addition (or maybe instead of),
         your contract should require that he carry the required
         insurance.

         I wish I had more details.  I'd guess I found this out in one
         or more books on home improvement, and possibly from the
         Hometime series on PBS.

         Pete

	I'm building a new home..  I required the builder to provide
	a certificate of insurance stating his coverage before he could
	start work and a written statement from him stating his liability
	for all sub-contractors he might bring onto the site.  Thank
	goodness neither has been needed.... 

	Side note is he also required I sign off to any guests or subs
	that I brought on site..   Fair is Fair

    We saw his insurance certificate, although we didn't read it, and thus
    I'm not really sure what's covered.  What concerns me is that he said
    he didn't need a separate workmen's compensation certificate (or other
    proof), since he doesn't have any employees (just him and his son).
    
       Gary

>>    Does the homeowner need to worry about workmen's compensation
>>    insurance, when hiring a contractor, or is that the contractor's
>>    responsibility?
    
In NH, you can check on your contractor or his subs by calling the NH 
Dept of Labor in Concord.  I was my own GC, so I would have been liable 
for the workman's comp if my subs weren't insured and anyone got hurt.  
I'm not sure of the law if you hired a GC.  The NH Dept of Labor would 
be able to answer that question.

I was lucky.  I know of at least one of my subs that did not have 
workman's comp insurance.  I'm presently suing him and there don't seem 
to be any records of his business anywhere I've checked.  NH Dept of 
Labor is one those places.


                                        Kurt

      If  you  don't  have  any  employees  WC  is  pretty cheap.  About
      $100/year as I recall.  Of course with no employees all it does is
      protect  you if you hire a subcontractor who is not covered.  As a
      business expense I would think that _anyone_ who does  contracting
      would  carry  this  coverage, even if not legally required.  Its a
      pretty cheap way to protect yourself.
      
      We were the general contractor for our house.  Bedford NH, about 4
      years ago. We carried WC plus we required all contractors we hired
      either  to have there insurance agent provide us with a certificat
      of WC coverage, or to give us a signed statement that they had  no
      employees.   This  was  in  addition to a certificate of liability
      coverage, although the two certifications might come on  a  single
      document.   I would continue to insist on this for any significant
      work I contract to have done on my house.  (No, we don't  continue
      to  cary the WC coverage for ourselves.)  This is standard pratice
      in the building industry.   If  your  contractor  is  hesitant  to
      comply, something is wrong.

      BTW,  a  photocopy  that  the  contractor  gives you is worthless.
      Insist on a document from the insurance agent. It should have both
      the contractors name and your name on it, plus the coverage limits
      and expiration date.  This might cost a few dollars -- like  maybe
      $5-15?   --  but  it  is  the  *ONLY* way you can be sure that the
      coverage  is  real  and  that  you  will  be  notified  if  it  is
      discontinued before the stated expiration date.
      
      Now  that  I've said all that... If the job is small and/or you're
      dealing with a small contractor who is known to you, etc., etc. --
      well,  you  might just decide to take a chance and forget all this
      insurance stuff.

    What is a Performance Bond ?
    
    Someone told me for  large construction your contractor should
    show evidence of a performance bond. How does this protect me.
    Where does the contractor get a performance bond.  

    
    2 cent definition
    
       Builder places money in a form of escrow or some other account and
    surrenders control to you. If he doesn't finish the work, money is
    yours, or can be used to offset repair work.
    

Performance bonds are usually usually required by Towns, etc. for work being
done by a developer on roads, sewer/water lines, etc.  They're put in place
to protect the Town in the event of default/non-compliance/whatever by the
developer.  The Town doesn't want to be left with, for example, a half-built
road to service a new housing development.  In this event, the Town calls the 
bond, and completes the work itself, hopefully at $0 cost to taxpayers
(as long as the bonding amount was correctly set).

Bonds are a form of financial guaranty, usually obtained by putting up $$$ or
some form of security to a bank or financial institution, in return for the
bond.  These days, bonds are not cheap.

I don't see where a bond would come into place for basic residential projects 
though.  Somehow I doubt asking a contractor to get a bond to cover you and
your project would get very far!  On the other hand, if you're buying a house
in a development that's still under construction, it might be worth checking 
with the Town Planner to see if there's a bond in place to insure completion
of roads/utilities/etc.  (There's a problem in a development in Hooksett, NH
where the planning board failed to require a bond for a new development.  When
the developer when bankrupt, there was no $$ around to complete the sewer
system.  I believe the residents are still on temporary holding tanks, several
years later.)


 -Mark

    Help!!!!
    
    We put out bids to a bunch of contractors.  We also got and checked
    references.  My problem is the contractor we liked gave us by far the
    best bid ( thousands less ), got great references, does GREAT work,
    BUT he says he had no Workers Comp. insurance.  What should I do?
    we really like him but don't want to get into any suits?  Can I take
    out insurance for him?  I have been told that in these times many
    contractors don't have insurance because of it's cost.  Is the
    insurance that I may be able to take out for him called Builder's Risk?
    Is this enough to protect me?  He said he makes sure that his sub's
    have insurance though.  I know this sounds a little odd that he makes
    sure his sub's have it but he himself does not have any.
    
    
    Thanks for any info.
    
    Kumar 

      DISCLAIMER:   I  am  not  an insurance expert or an attorney.  The
      following is based on my  experience  acting  as  my  own  general
      contractor  for the house we now live in.  This was New Hampshire,
      about 6 years ago.  Things may have changes since then  and  other
      states may be different.
                     
>    BUT he says he had no Workers Comp. insurance.  What should I do?

      If  a  contractor  has  no  employees  he  is not required to have
      Workman's Compensation insurance.  There may also be an  exception
      if he only employees a limited number of immediate family members. 
      
      If  this  is  the case, get him to give you a statement that he is
      not required by law to carry workman's comp.
      
      If  this is not the case don't use him.  He is operating illegally
      and you could end up with a mess if an employee of his was injured
      on the job.  
      
      In  either  case you may wish to consider buying workmans comp for
      yourself.  The minimum coverage, with no employees,  is  something
      like $100 per year.  I think it can be pro-rated for less than one
      year if your project takes less time than that.   The  reason  for
      this  is  that  you, as "general contractor", could be held liable
      for workmans comp benefits if  your  "subcontractor"  doesn't  the
      right insurance.  
      
      ------------------------------------------------------------------
      
      In  addition  to  workman's  comp,  your subcontractor should have
      liability insurance. I think that's what "builder's Risk" is. This
      covers any damage he does or any injury he causes to someone other
      than his employee. I don't believe that it is required by law, but
      I think that any contractor is very foolish not to carry it.
      
      Here  again,  you  might  wish  to  consider  purchasing  your own
      construction liability insurance for your own  protection.   Check
      that  your  homeowner's policy (if this is your present home thats
      being worked on) may cover this risk.
      
      ------------------------------------------------------------------
      
      OPINION:   Any  contractor  that  doesn't carry Workman's Comp and
      Liability insurance probably doesn't know how to run a  business.
      Either  that,  or  he's willing to take an awfully big chance -- a
      change that could effect YOU.
       
      In  the current economic climate I suspect that there are a lot of
      skilled, reliable construction workers who've been  forced  to  go
      out  on  their own.  The fact that they can do a good job in their
      trade does *NOT* mean  that  they  know  how  to  run  a  business
      properly.  

      The savings may look attractive, and the risk is low, but...
      If things go wrong you could end up loosing  everything  you  own.
      Million dollar liability settlements aren't uncommon.
      
      I  would  not  consider  a  contractor  who does not have Workmans
      Compensation Insurance if required, and Liability Insurance in any
      case.
      
      Talk  to your insurance agent about what coverage you should have.
      If you agent is not knowledgeable in this area, find one who is.
      
      In southern NH I would recommend my agent:
      
          Mahoney-Trussel Insurance -- (603) 436-7069
              P.O. Box 698             (800) 527-4421
              Greenland  NH  03840
      

    I called the MA builders liscensing board about this.  They siad that
    it is not required by law in MA to carry WC.  He is going to be the
    general contractor for the job on MY LOT.   I guess this is key because
    if it is his lot he is liable for himself.  He is probably cheap enough
    that I could get insurance for him.  Am I allowed to do this?  I will
    take the suggestion of the previous note taker and ask for workers
    compensation AND liability for him.  If anyone has ever been in this
    situation could they please let me know the procedure and what insurance
    company they used.
                                                                   
    
    Thanks!! Kumar

    I do construction on the side. when I first started 5 years ago I
    looked into workmens comp and it was as expensive as hell  for me.
    but if I wanted to buy it for any employees it was really reasonable.
    but I had no employees. so I took my chances.  if you have homeowners
    ins there is a clause in there about people working on your house.
    
    Paul

    Well, here is the latest in workers compensation story.  There is no
    insurance company ( at least the 3 that I talked to ) that will let
    me insure any contractors or sub-contractors.  If I want insurance he
    himself has to take it out and that I could maybe pay him for it.  It
    looks like it is going to be around 1000 dollars if he takes it out and
    charges me for it.  One of the insurance people did give me a form
    called a 'hold harmeless agreement' which states that he absolves me
    of any responsability if he gets hurt or any of his subs gets hurt.
    Has anyone heard of this?  I am going to ask my lawyer about it
    tonight.
    
    Thanks, Kumar

    I think that sometimes a town is given a letter of credit or something
    like that from a bank which indicates that the bank is backing the
    contractor.  The town of Hudson, NH, has announced a list of banks from
    which they will accept such letters because some banks are no longer
    likely to be able to back up their promises.  (Accroding to a recent
    report most of NH's banks are now at least Technically Insolvent.)
    
    ed

    If you are a New Hampshire homeowner, the holding of insurance to
    protect persons hired to work on your property is mandatory and is
    included in your standard homeowner's endorsements.  I cannot say
    whether this covers your present situation, but you might check
    with your agent.
    
    PBM
    

    Here is the official scoop from the Mass. Dept. of industrial
    accidents.  I talked to the attorney there and also mine own.  They
    both stated that any sort of waiver form is NOT binding and the judge
    probably will not look at it.  So my only options are to go with
    the contractor that I like and have him take out WC and liability and 
    re-imburse him for it or go with someone else.
    
    I am leaning heavily towards going with someone else.  
    
    Thanks for the info from everyone.
    
    Kumar

>    I am leaning heavily towards going with someone else.  

To reinforce your decision, remember that this guy is experienced and
knows what he's doing -- and he refuses to hire anyone to work for *him*
who doesn't have full insurance coverage!  But he doesn't care if the
person he works for takes a risk because *he* doesn't have coverage...

	Luck,
	Larry

    	After talking to my insurance agent, she said that an employer MUST
    carry WC insurance on ALL employees. However, unless the business is Inc.
    the owner cannot carry WC insurance on him/her self. The only way to be
    insured (in that way) is to carry disability insurance. This is totally
    separate from liability/completed operations insurance. So, if your
    contractor is DBA... he CANNOT (at any price) carry WO on himself.

    	I hope this eliminates some confusion.

    		CB

    
    Hi CB,
    
    	  Was the answer you were given for the state of Mass. only and was
    she reffering to working for homeowners, contractors etc?
    
    I know when I was in business, working for myself by myself, most of
    the General Contractors required me to carry WC. The way it worked was
    if I did not cover myself with WC they had to cover me. Needless to say
    I always carried WC. The general C. gets audited at the end of the year
    by their WC carrier and if they show sub-contract labor on the books the 
    sub-contractors WC will have to be paid by the General contractor unless 
    the G.C. has a certificate a of insurance from the sub-contractor on
    file showing proof that the Sub. is covered for WC. Now I don't know if
    that is how it works everywhere. Thats the way it worked in NH. I was not 
    incorporated. I operated as sole prop. under my own name. Still do. 
    
	I was never requested to carry WC while working for individuals on
    their own homes. I still think that as a homeowner with the proper
    insurance you are covered for someone else working on your property
    getting hurt on the job. Check your polcies and or with your insurance
    agent for the details.
    
	P
                                                    

I am in the process of getting going on a new home.  We asked the contractor
about saving some $$'s by doing some of the finish work (painting/staining)
ourselves.  He said that we would not be able to get a CO and/or mortgage unless
the house was complete and, until the house is complete, it still belongs to 
him.  Since the house is his, at this point, he is liable for any WC and 
therefor won't let us do work in "his" house.  My questions are: Can we
get our own insurance (short term) while we do the work?  Is this type of
insurance expensive?


Thanks,
Serv	

    
    Find a new contractor. This guy is being a jerk. 
    
    Mike
    

Our contractor had clauses in the contract such that if we didn't do our part of
the job with a certain period of time, he would do it and charge us.  This
seemed like a fair solution to us.

								-- Chuck Newman

    RE.18
    
    	P,
    
    	This is in the PRM.

    
    Hi there,
    
    		Thanks for getting back to me. Whats the PRM?
    
    	This is good info. I don't always get the chance to talk to soemone
    who works as a contractor based in mass. Nice to compare notes.
    
    P

    RE: .23

    	People's Republic of Massachusetts

    
    
    :') I should have known....
    
    P

    I am in the process of remodeling the rooms in my home which means I
    will be getting bids from contractors according to the work I need
    done.
    
    Question.  Insured vs Uninsured contractors.  What are your opinions
    concerning this topic?  Do I get only insured contractors?  Do I run
    the risk of being sued if I let an uninsured worker in my home.  What
    does the insurance cover besides workmans comp and liability? What does 
    the liability part cover the contractor for?
    
    

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Vic [Moderator]

I'm looking to have a tree taken down, and one of the estimates I've obtained
has a clause in it to the effect of (I'm paraphrasing), "Owner is responsible
for carrying fire, tornado, and OTHER NECESSARY INSURANCE (emphasis mine -R).
Our workers are covered by Worker's Compensation."

To me, this sounds as if the contractor would not be liable if he drops the
tree on my house, or worse, the neighbor's house. Is this standard practice?

Thanks,
Rich

    No - the contractor should carry a liability policy with a high
    limit ($1M is not uncommon).  Many tree removal contractors do NOT
    have such insurance; if the falling tree causes damage, YOU are
    liable for it.  Personally, I would not employ an uninsured
    contractor; there are plenty around who are insured.
    
    				Steve

    RE .26

    	Is this in small print near the bottom of the "Proposal"??? If so,
    I'd be willing to bet that the "blank form" is from "NEBS". NEBS is a
    manufacture of printed forms for contractors, retailers ect.... What you
    quoted looks like (from memory) what is on my blank forms. The bottom
    line, ask for a certificate of insurance with the proposal. They don't
    cost anything to the contractor (at least mine don't), and let you know
    what insurance he does have, and the limits. All of the contractors
    that I sub for, REQUIRE one for their files. The insurance companies
    are getting really tough now, so everything has to be on file.

    	It doesn't hurt to ask :*)

    	CB

    I am going to hire someone to update the electrical system in my house
    (e.g. replace fusebox with CB panel, change service to 200AMP, + some 
    other minor jobs). I talked to a few electrician. One of them has a low 
    price (appr. $700 lower than others). He has W.C. He said he can do it 
    with or without liability insurance. The difference will be $200 more
    with liability. What does the electrician's liability cover ? Does my 
    homeowner insurance (Metpay 100% replacement cost) provide sufficient 
    coverage without his liability insurance. What's the risk ?
    

Sounds like snake oil.

He either has liability insurance or he doesn't, its a yearly policy.

Sounds like he doesn't have it but if you insist he must have it then he wants
to get you to pay for it.

You sure he has a license?

-Tim

I tend to agree with .30 - liability insurance is a annual thing.

Now what he may be saying is "you want me to pull a permit?".  If this is in
MA, when electrians pull permits they must show proof of insurance equal to the
properity they are working on - or present a signed waiver of some sort by the
owner of the properity.  At least that is the way it was described to me
several years ago - (around the time I stopped doing that kind of work).

bjm

The electrician having or not having liability insurance does not
make any difference in what he is responsible for, it just impacts 
the likelihood that an injured party (you) could collect from him
if need be (blood from a stone and all that).
Whether your insurance would pay AT ALL for an error on HIS part is 
open to question, and if you care to proceed in that vein, you might 
want to check with your carrier for another data point.

- tom]

    He said he is a licensed electrician in Ma (what kind of proof should
    I asked?). He works for the union and does side job in weekend. I
    didn't know liab insurance is an annual fee. I'm not sure if he already
    has liab insurance or not. Based on the last few replies, it is likely
    that he does not have it, and therefore will charge me extra $200 if I
    insisted to have him carry the liab insurance. Do you know how much the
    annual fee for liab ins cost ? Even with the $200 extra, it is still
    $500 (25%) less than the estimate from other electricians.
    
    re: .31  Yes, he will pull the permit. And he had mentioned to have me
    signed a waiver as you said.
    
    re: .32  I will talk to Metpay. What specific question(s) should I be
    asking ?
    
    Thanks
    
    
    

>    re: .32  I will talk to Metpay. What specific question(s) should I be
>    asking ?

1) What does contractors' liability coverage cover?
2) Does my homeowner's liability coverage cover a contractor
   working on my home for damage done by him:
  a) to me, my family, and my property?
  b) to him and his entourage?
  c) to anybody else (he trips the mailman with a working wire
     across the walkway)?

- tom]