Q: I am thinking of hiring a company to install a door in my home. I notice on the Contractors State Licensing Board Web site that this company is exempt from having workers’ comp insurance because it has no employees. I assume this means that it will sub out the actual installation of my door.
My question is whether I will be liable if one of the workers gets hurt on my property. Who is legally responsible — the company or me? I don’t want my homeowner’s insurance to be at risk.
Also, I’ve been shopping for an interior painter and notice that many licensed firms are also exempt from having workers’ comp. I’m afraid I could be at risk with these painting firms too.
Last, do you recommend that whomever I hire also carry personal liability/property damage insurance? I’m not sure exactly what to ask the contractor for in this regard.
A: Your concerns are well taken. Here are the answers to your questions in the order in which you asked them:
1. Your assumption that the company will subcontract the work may not be correct. Installation of a door is a small job and can easily be handled by an owner-operator.
The door installation company is not required to maintain workers’ compensation insurance coverage unless it has employees. Owner-operators are exempt.
If the company chooses to subcontract the work, workers’ compensation insurance is required only if the subcontractor’s employee is performing the work.
For more information on workers’ compensation go to Division of Workers’ Compensation Web site www.dir.ca.gov/dwc/faqs.html.
2. According to the licensing board Web site, if a contractor has employees, workers’ compensation insurance coverage is required.
Whether you are liable if an uninsured worker is injured on your job is a question best left to attorneys. However, we all know that anyone can sue someone for just about anything at any time. Plaintiffs look to potential defendants with “deep pockets” for money damages.
We think it’s unlikely that a contractor would carry other types of insurance if he does not carry workers’ compensation insurance on his employees. At this point, the “deep pocket” is you and your insurance company.
If a worker is injured while working on your property and the contractor doesn’t have insurance, you could be asked to pay for injuries and rehabilitation through your homeowner’s insurance policy.
Verify whether an employee is doing the work and if so, verify your contractor’s workers’ compensation coverage on the licensing board Web site, www.cslb.ca.gov, or by phone at (800) 321-2752.
3. Absolutely require the contractor to provide proof of personal liability and property damage insurance before you hire him to do any work on your home. Failure to do so puts you at risk.
Verify coverage on the Web site. Also, 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 coverage.
Ask the insurance carrier some specific hypothetical questions like, “Do you cover the contractor if he is injured when installing my door?” or “What happens if he damages my wall in the process of installing the door?”
We would also suggest that you ask whether the contractor carries a general liability insurance policy to protect against third-party bodily injury and property damage.
According to the licensing board, licensed contractors are not required by law to carry general liability insurance. But home improvement contractors must tell you whether they carry it. Ask. If uninsured, they should be able to explain how they would cover losses that would ordinarily be covered by insurance.
Sounds like a lot to go through for just replacing a door, doesn’t it? But if you go through this process you’ll avoid liability and probably get a better result.
Contractors who take the time and incur the expense to be licensed and insured are serious about their business and generally will do a better job than those who are not.