I need a Contractor who is Licensed and Insured
You hear this statement all the time but what does it mean and how do you know who you are hiring has the correct license and insurance for Florida?
This is a little long but contains a lot of good information. There are also source links at the bottom if you want to read all the details in full.
So here we go.
What "Licensed Contractor" Means in Florida
The state of Florida requires both residential and commercial builders and contractors to be licensed. There are separate licensing requirements for residential contractors, mechanical contractors (plumbing, electrical, HVAC) and general contractors. Acquiring a license in a specific field demonstrates that the person has at least a minimal level of competence in that field and Florida Contractors are required to obtain 14 hours of continuing education to maintain their license every 2 years.
Homeowners can confirm a contractor's license is legitimate and current by visiting the state's website. Select “Verify a license,” and then search by license number or contractor name. An occupational license does not qualify an individual to act as a contractor, but they should have one to operate a business in Florida.
But why does it matter?
In most circumstances, unlicensed contractors offer lower quotes because they do not pay a licensing fee, or obtain a bond to protect their work, and in many cases, don’t purchase liability or workers compensation insurance. Without these expenses, the unlicensed contractor can offer a lower rate.
Hiring a licensed contractor offers you protections for your investment that you can not get from an unlicensed contractor. In the state of Florida you are even more protected when hiring a licensed contractors because there are safe guards, The Florida Homeowners’ Construction Recovery Fund. If you lose money on a project performed under contract where the loss results from specified violations of Florida law by a licensed contractor, you may be eligible for payment from this fund. If you choose an unlicensed contractor at your home or business, you have no rights under the statute that created this fund.
What 'Insured' Means in Florida
The two most important types of insurance to focus on when hiring a contractor.
Workers’ Compensation and General Liability.
Workers’ compensation insurance protects homeowners from liability for injuries incurred while workers are in their homes or on their property. If somebody is injured working in your home and is not covered by a workers' compensation policy, you might be responsible for their lost wages and medical costs.
Independent contractors may also carry an exemption certification. Exemptions are available to business owners who opt out of the insurance coverage protections for themselves and who meet the requirements for an exemption.
General liability insurance protects the homeowner from bodily injury, property damage or personal injury. In the event there would be damage or loss to a home or structure due to a contractor’s negligence, your homeowners' property insurance won’t likely cover the damage. Most policies explicitly exclude damages caused by contractors. It would be necessary for the contractor’s general liability insurance to cover this damage. If the contractor is not insured, you are at risk.
How do I know?
Ask to see their license and certificates of insurance, it is your best protection. Any reputable contractor will happily provide proper documentation.
Other things to look for
No license number in advertisement or postings. By law, contractors that are licensed must include their license number in all advertising.
They want all or most of the money up front and will only accept cash. They may also want you to write the check to them individually or to “cash”.
The most important thing for a homeowner to remember is to protect themselves and their assets, which is why it’s so important to hire a licensed professional.
Hurricane Season kicks off, we will be back to provide tools and useful information for the up coming season.