If you are confused about hiring a contractor to do work around your home you are not alone. The terminology is a bit confusing, laws in each state are different and regulations are constantly changing which makes the whole process of hiring contractors to perform work on your home is difficult. Licensing within different trades be it electricians, plumbers, construction or heating and cooling are very specific as well. Below we attempt to define the terminology used throughout the industry and how it relates to specific contractors within different industries.
Licensed Contractors: A license is granted to contractors throughout different trades as authorized by local and state laws. This ensures that the contractor has passed tests regarding their business practices, trade skills and ability to pay for the fees associated with the required license and bonds.
Registered Contractors: Contractors that have been registered are only required to prove they are offer insurance and can pay the required fees. These requirements are often less stringent than what is required for a contractor to become licensed. To be a registered contractor you rarely have to pass any trade related competency tests or to be bonded. Licensing and registration terms are often used interchangeably.
Bonded Contractors: Contractors that are bonded have obtained an agreement with a third party, a private company that offers surety bonds, to ensure that the consumer is protected against any misdoings by the contractor. If contractors fail to perform work as contracted, fail to pay for materials or their subcontractors or what not, their customer can petition the surety company for reimbursement for the failure of the contractor to perform as stated within the signed contract.
Insured Contractors: Contractors should all be insured. They should hold two types of insurance: liability insurance and workers compensation. Liability insurance protects the homeowner against damage done to their property. Workers compensation protects workers hired by the contractor from coming after the homeowner if injured or killed while working on your home.
Before choosing a contractor to complete work around your home verify you are protected from wrongdoing. Ask contractors for all certificates that state they are registered, licensed, bonded and insured. If the status of any of these certifications is questionable don’t feel pressured into hiring this individual contractor. All certificates should be current and cover all aspects of the project that is to be completed. Once you have confirmed and verified a contractor be sure to file copies of all paperwork, certifications and such in a place that is easily accessible. This will ensure if proof of you will have it at your finger tips.