Perils of Not Hiring a Licensed and Insured Contractor by pjobrokerage


									Perils of Not Hiring a
Licensed and Insured

       PJO Insurance Brokerage
          By Patrick O’ Neill
       4103 E. Prickly Pear Trail
        Phoenix, Arizona 85050
         Office: 480-248-7495
          Fax: 480-248-7493
Some things never seem to amaze me. As I was watching the local news, there
was a report of a couple that had contracted to have their roof repaired. They
had given the roofing contractor quite a chunk of money up-front to perform the
work. Now the roofing contractor did some work, but, after a few days,
disappeared with the money and materials that had been purchased with their
money. As the reporters were trying to help the couple recover their hard-
earned money, they discovered that the roofing company didn't have a license,
no insurance to speak of, and, worse yet, this company didn't even exist legally.
The couple had mentioned that the quote they had received for the work that
was to be done was about 25% lower than another company that had given
them a quote from a man who seemed nice and knew what he was talking
about. You know, there is an old saying, if something is too good to be true, it
probably isn’t! A quote for repairs that is significantly below others should be a
red flag, meaning you need to do some serious investigating to see why. In this
case, the couple did no investigation and did not make any inquiries about the
company they chose, and they ultimately paid a very heavy price.
When choosing a contractor for your specific job, the first thing to do is check
the Arizona Registrar of Contractors to see if the contractor is indeed licensed.
Also, on that site, it will also show if the contractor has had any

  PJO Insurance Brokerage | 4103 E. Prickly Pear Trail Phoenix. Arizona 85050 | 480-248-7495 |
complaints or fines and exactly what his license was issued for. For example, if
you were hiring a contractor for a plumbing job, you want to make sure he is
licensed for plumbing and not find out later when something went wrong that he
was not licensed for it. Also, don’t take the first bid; get at least 3 bids to
               Remember, if one bid seems low, say 20% or more lower than the
          others, investigate and find out why. Are they using quality materials
          and including everything that needs to be done in the
quote. Read the fine print of all the bids you receive to make sure you are
comparing apples to apples. Ask for references from all the bidders, and make
sure you follow up with the references. Ask as many questions as you want
until you feel you have gotten all the responses necessary to make an informed
decision. Also, get everything in writing and signed by the bidder. By doing this,
you will have a record of everything you talked about and agreed to, what the
project will entail, and what the final total price will be. In addition, it’s a good
idea to have the contractor include a time frame to complete the project. Once
you choose a contractor, set up a pay schedule. Start with a small down
payment with additional funds released as the project moves forward, is
properly inspected, and work done to your satisfaction. Also,

   PJO Insurance Brokerage | 4103 E. Prickly Pear Trail Phoenix. Arizona 85050 | 480-248-7495 |
reserve your final payment until all work has been completed with a final
inspection. You shouldn’t be stuck with unfinished work with the contractor
holding all your money. One area that is just important as the others I have
talked about previously is making sure your contractor carries all the proper
insurance. The first coverage that the contractor should carry is General
Liability Insurance. It is imperative that the contractor provides you with a
certificate of insurance showing his coverages. Also, you may want to contact
the insurance agency that issued the certificate and make sure that the
coverage is current, has not been cancelled for nonpayment, and the insurance
provides coverage for the job that the contractor is performing for you. If your
contractor is going to sub out some of the work, make sure you get certificates
of insurance from the subcontractors as well. In addition, if there are other
workers besides the main contractor, make sure you get a current certificate of
insurance as evidence of their workers compensation coverage. Whether you
are doing a major remodeling project or building a new custom home, having
builder’s risk insurance is a must. By taking the proper precautions in hiring an
Arizona licensed and insured contractor in the beginning, can save you from a
major headache in the end if you don’t.
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   PJO Insurance Brokerage | 4103 E. Prickly Pear Trail Phoenix. Arizona 85050 | 480-248-7495 |

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