Know your Contractor

Everyone always asks "Are you licensed" and "Do you have insurance"?
Well these are good questions, but do consumers really know what they are asking? Furthermore, do they know what to do with the answers?

Lets start with the first question, Licensing.

A better question than "Are you licensed" is asking "What type of license do you carry?" Is it a specialty contractors license where all it takes is $50 and 3 letters of recommendation? Are they a residential builder where they have to pass a test, or are they a General Contractor where they not only have to pass a 6 hour test, but also meet minimum financial requirements? (A general contractor can fall into one of five different categories according to financial information.) You can check the licensing of any contractor on your state's licensing website. In South Carolina the SCLLR regulates licensing. Visit the following web address to go to South Carolina's website:

http://www.llr.state.sc.us/sitemap.asp

The above discussed types of licenses takes care of a contractors "Trade License," but most municipalities also require an additional license that allows the contractor to operate in the specific town/city. And in some cases, you need a state, county, and city license before beginning to build a project. Now personally speaking, this is double taxation; but that is a whole other blog. As a consumer, these are hidden costs that you need to take into consideration when comparing bids.

The second question is insurance.

The first type of insurance is general liability. Contractors carry this in case they screw something up other than your project; for example, liability insurance covers the contractor if they drive their truck into your neighbors house. The second type of insurance is Workman's Compensation. Many homeowners don't know that their homeowners policy is at risk if a contractor gets hurt on their site and that contractor doesn't carry Workman's comp. The third type of insurance is Builders risk. This type of insurance is generally reserved for larger scale projects.

Other things to consider when looking for a contractor:

What type of work do they primarily perform?
How many projects similar to yours have they completed?
You may want to ask for a list of references of not only customers but also trades and vendors.
Who does their engineering? This is a big one because many contractors "just know what it takes" and this has miss-served many people.

These are all things that need to be discussed prior to hiring a contractor.

I will leave you with some word of advice that we will call the old man column(named after dad):

The bitter taste of poor craftsmanship will linger long after the taste of a sweet price.