How do I check out a contractor?
When starting a new project, always check out any contractors that will be used. Follow these 3 easy steps to make sure you get the best contractor for your project.
1. The first thing to do is ask for references. Do not accept the standard three references offered by most contractors. Most assuredly even a bad contractor can come up with three clients that were happy after the job was complete. What you want to see is the last three jobs they have completed in calendar order. This will not only tell you how busy they are, but will confirm the last three clients were happy with their services. The contractor may say the last jobs completed were for different work, but that should not matter because the results will show that they were prompt and that the customer was happy with the results. It should also show the contractor delivered what was expected and proposed, and met the client’s expectations.
2. Look up the contractor’s license on the states L&I website. Click HERE for Washington State.
You will need to do a search for the contractor. The L&I website is sometimes difficult since their search engine will need you to match the name of the contractor exactly. For example, if you type Robbins and Company, your search will come up with no results, but if you type Robbins & Co House Moving Inc, you will find the company and their contractor information. One of the easiest ways is to ask the contractor for their UBI number, which all contractors have to have and it makes researching them more effective. Once you have them identified, you will see their business and licensing information. Here you should be looking for their current status.
Their active insurance information and bonding should be listed. You want to see that their limits are acceptable and current. Scroll down the page to see if there have been any violations or claims on their bond. While this page is informative, it doesn’t provide a total picture. It’s possible the contractor may have had their license suspended or revoked for some period of time, but that won’t be mentioned. It only shows if they’re current. There are times an infraction is mentioned, and if you look it up, it may have been for temporarily working without a license.
You could also call L&I directly and ask if the contractor has ever had a cancelled license, and why.While on the same page go to the top and you will see the following link: verify workman’s comp. Click on this link. Here you can see if they are current, their estimated number of employees, and when their workman’s comp insurance expires.
3. Perhaps the most important thing to do next is click on get risk classification information. What this will tell you is what classification the contractor is reporting his work in. Since premium and coverage rates vary depending on the risk to the employees, the state varies the rate and coverage. For example, an employee who works in an office will have a lower rate than say, a logger. The reason this is important information for you the consumer is because if you hire a contractor to do roofing and they are reporting employees as doing landscaping so as to get away with paying a lower worker’s comp rate, an employee who gets hurt on the roof or falls may not be covered. L&I would seek an explanation as to why the landscaper was on the roof. In some cases, because they would be on your property, there may be some liability to the homeowner if the contractors’ coverages are not correct.
There may also be secondary consequences. When a business applies for liability insurance, the carrier will use the reported classification to determine the general liability coverage. For example, if a contractor’s staff is listed as landscapers, their insurance company will provide a general liability for landscaping. All you will see is the limits of the policy, not the type of work. If you were to hire this contractor to do roofing on your home and they caught the house on fire, when the claim was turned in to the insurance company, the insurance company may say there was not any coverage for the damages since the contractor was not covered for roofing.
Another thing to notice is if the contractor has no employees or their account is closed. This raises several questions as to how a contractor is doing work with no staff. If you ask the contractor, you may get a response that they will be using sub-contractors. While legitimate, it is illegal if the subs are not licensed as contractors. If that is the response, start this same process beginning on #1 (How do I check out a contractor?) for each contractor you are told will be used. Don’t be afraid to ask for a list of subs and lien releases from all the subs upon completion of the work before paying your contractor.
This is the process we use and it has worked well. I hope this information will be helpful.