Most cities and states in the US have strict licensing requirements for contractors. The type of license they need depends on the city, the type of project, and the trades they are involved in, but at a minimum, most contractors will need a business license, a trade license, public liability insurance and workmen’s compensation.
Additional licenses for specialties like electrical and plumbing, health and safety certifications and other special documents may also be required for a contractor to work legally on a construction project, and what most clients don’t realize is that even though it’s not your responsibility to ensure that contractors have them, if something goes wrong, you could still be on the hook. Here’s what you need to know about professional license verification.
Hazy Liability Issues
When you hire a contractor on any project on property that you own or operate, whether you know it or not, you are accepting partial responsibility for everything they and their employees do.
In the case of homeowners, that may be as simple as being responsible for damage done by a contractor to a garden fence or garage, or for a lost dog that escaped due to negligence. In the case of commercial projects, it could mean massive civil or criminal lawsuits for public liability issues, health and safety oversight or even shoddy workmanship.
The reason for this is that as the employer of a contractor, the law assumes that you have done your due diligence, and that you’ve gone through the process of professional license verification and pre-employment checks as a part of your pre-award process. If you have not, or you haven’t taken enough care in your investigation, you may find yourself in hot water if something goes wrong.
Varying Degrees of Licensing Troubles
When government departments and large corporations invite bids for a construction project, there is a lengthy process that requires detailed proposals, document submission and many layers of checks and balances. That’s because they, just like you, are legally liable to a degree if something goes wrong, and they simply won’t award a contract to a company that cannot prove that every license, insurance policy and document is in order and up to date.
Most companies don’t have the same resources at their disposal, however, and they have to either conduct their own checks, or hire a professional. On anything larger than a small construction project at your own home, we would always recommend that you hire a professional to conduct pre-employment checks and professional license verification, and here’s why:
- Even though they’re not strictly your employee, for legal purposes, they will often be seen as one, and anything they do or fail to do could rebound onto your company.
- Professional license problems aren’t always about lacking documentation. Sometimes, documents are forged or out of date. A professional will be able to spot these types of issues, and ask the right questions in the right places.
- Confirming that all the necessary paperwork is in place before breaking ground may cost a little, but it’s nothing compared to the costs you could face if something goes wrong.
The contractor / client relationship in construction is a complex one, but there’s no getting around the fact that the onus is usually on the client to ensure that they make the right hiring decisions. Make sure you do, and ensure that you conduct detailed verification and vetting processes before you sign on the dotted line, and remember, if you’re not sure exactly what is required for your project, your city building or planning department can help get you started, and we can do the rest.