The Dangers of Hiring an Uninsured Painting Contractor
It is indeed tempting to hire an unlicensed and/or uninsured painting contractor. Though they may present you with an opportunity to save money in the short term, the long term risk to which you are being exposed may not be worth the potential savings. Consider the fact that uninsured painting contractors are a very real danger to your financial affairs. A painting "contractor" that does not carry worker's compensation insurance exposes you to significant financial risk in the event of an injury that occurs on your property.
How is it that you can be at risk by hiring an uninsured painting contractor? By law, hiring an unlicensed contractor is the direct responsibility of the homeowner. Thus, the homeowner is accountable for all outcomes associated with the unlicensed contractor's work.
If an employee of the painting "contractor" is hurt while working on your property and a prolonged hospital stay is required, different insurance scenarios can come into play depending on the status of the contractor. If the contractor is licensed, his workers compensation policy will cover the expenses. If he is unlicensed and uninsured, then your insurance policy becomes the primary insurance.
However, when a serious accident occurs, the injured party will very likely sue to recover their losses. If you knowingly hired an unlicensed contractor and an employee is injured during the performance of the contract, then your insurance company has the right to not pay the claim, leaving you exposed to the medical or personal injury bills. If the insurance company wins a judgment against you, any asset you receive in the future (even inheritance or money from your business) can have a lien placed against it. All judgments are made a part of your credit history and remain there until they are paid.
When hiring a painting contractor, make sure they carry worker's compensation insurance. Do your homework by taking the time to check with the insurance agency to verify that the policy is still effective and will be throughout the duration of your engagement.