General Contractor Blog

Hiring unlicensed contractors in Santa Barbara can cost far more than you save

During the last few years competition for remodeling jobs in the Santa Barbara area has increased dramatically. Many licensed contractors have admitted to me that, in all their years in the construction industry, from 2009 to the present has been the most difficult time. The hard economic climate we have been in has caused a large number of construction-related businesses to fold. Fortunately things do seem to be picking up as we move into 2014.

A frustrating consequence of the downturn in demand for quality remodeling in Santa Barbra is increased illegal contracting activity by people who do not have a license issued by the California State Contractors License Board. Anyone performing construction work in California totaling $500 or more in labor and materials is legally required to be licensed by the Contractors State License Board.

One reason unlicensed contractors can charge their clients less is that they do not carry insurance—either general liability, or workers compensation insurance. They pass these “savings” on to you, BUT they are also exposing you to risk. If someone gets hurt on your job, you are the party who is liable to be sued. You could also be liable for the workers compensation benefits the injured would be entitled to. If that happens, what you hoped would be a simple $1000 repair bill could turn into a bill for tens of thousands of dollars, or more. Further, if a neighbor’s property, a passerby, or a visitor is negligently damaged by the contractor, you, as the person who hired the contractor, can be liable.

Licensed contractors carry general liability insurance and workers compensation insurance to protect homeowners from the wide variety of risks that are ever-present during construction. Falling off a ladder, or a roof; tripping over cords; tumbling down stairs that are no longer there; falling into temporary trenches that have been dug; stepping on a nail; injuring oneself with a power tool—all are common risks on a building site, which is precisely why licensed contractors are required to carry insurance. More subtle—and often more dangerous risks—include exposure to lead, asbestos, volatile vapors, and other hazardous materials that an unlicensed contractor is unlikely to provide adequate protection from.

For all these reasons, prudent homeowner should always ask for an insurance certificate for workers comp and general liability and the homeowner should request that they be included as “named insured.” An unlicensed contractor will not be able to provide you with these important certificates because you have to be properly licensed to be insured.

When you hire someone to work on your property make sure that they are a licensed professional. You can check the status of a contractor’s license in California by visiting the Contractors State License Board website. Don’t make the mistake of trying to save a few dollars in exchange for thousands of dollars in risk. If something goes wrong you can end up paying much more than you ever imagined.
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