Did you know that hiring an unlicensed contractor puts you as the property owner at a huge risk?

Think about this scenario—you hire a contractor off Craigslist because their estimate was $2,000 less expensive than a local company your friend recommended.

Kurt_Miller.jpgThe Craigslist contractor says they have a license to do business in your city and you trust that they do, so you don’t ask to see a copy–probably because you feel asking for proof shows a level of distrust and who wants to start a business relationship that way, right?

The job starts and all appears to be going well—the contractor is friendly, shows up each day and seems to be making progress.

On day four of the project he brings along a friend to help with some heavy lifting and tricky work up on a ladder. That person falls from the ladder and lands on a paved surface below, leading to an ambulance ride and a night in the hospital. Uh oh.

What if that Craigslist contractor was not actually licensed, insured and bonded? Who would be responsible for the medical bills of your contractor’s friend who fell off the ladder? The answer may be surprising.

You as the homeowner could be held responsible for medical bills associated with people working on your property…which would surely cost more than the $2,000 saved by hiring an un-registered/un-licensed contractor.

In Washington State contractors are regulated by Department of Labor and Industries, as a protection for consumers and employees.

In order to register as a contractor, individuals need to set up their business structure (choosing to be a sole-proprietor, general partnership, LLC, etc.). They must also register with WA Secretary of State and complete a business license application online.

Those choosing to hire employees also are required to register and file reports with the IRS.

Lastly, contractors in Washington State need to purchase bond and liability insurance—this is protection for you as a consumer!

Liability insurance is put in place to cover accidental damage a contractor makes on your property as well as workplace injuries (like that fall from the ladder).

How to spot red flags and report contractor fraud in Washington State.

In the end, you as consumer need to evaluate the risk/reward factors. Is it worth it to potentially save a bit of money by hiring an unlicensed individual to work on your property, or would you feel safer and more protected by choosing a contracting firm that has followed the rules by legally setting up their business, paying for insurance and doing what it takes to protect their employees?