Is having Worker's Compensation really important?

[kehlar]

I'm getting a bid from a company that's been around for more than 80 years and seem to have a very good record in the community. However when I checked up on their license it showed that they were exempt from having worker's compensation because they don't have any employee. I guess this means that they subcontract their work. Is this something I should be really concerned about for liability reasons? Or is it pretty common and should not eliminate them from getting my business especially considering their longevity?

Thanks.

[Windowman]

Yes it is very important, It is ok for them not to have it BUT they more than likely sub it out, So then you have to make sure the sub has it for his workers and 9 out of 10 times they do not. If you decide to go with them call and ask them! If he dont have it and his worker gets hurt they can sue you. If so tell them you want to see a copy of the subs workers comp!

20 years in the biz.

[Window4U (IL)]

I agree.
Many contractors hire subs to get away from the WC issue. The sub himself may even be exempt himself but anyone else working on the job for him will a liability risk for you.

[Bill]

Workers compensation laws may differ from state to state, here in New Jersey the law states that all workers must be covered by their employer. With a sole proprietorship a partnership or an LLC the owners may elect to not cover themselves but if a GC or a home owner hires them technically the GC or the home owner must cover the principal if they work on the job. The compensation policy if they even have one will cover their employees.

I would make sure that all working on the job are covered. Your home owner’s policy does have workers compensation for domestic help but it would not cover a trade. If there is any question you can take out a rider on your home owner’s policy to cover a specific trade and this should not be very expensive.

Bill

[kehlar]

Thanks for all the replies! I'll be sure to call tomorrow and make sure they have worker's comp before going any further. The owner of the company spent several hours with me talking about the windows, general home construction work (I want to do a lot of work on my house), was very forthcoming with information, provided a long list of references and I had a very good feeling about him. I got the estimates from him and it seemed reasonable (comparable to two other estimates I got from reputable companies). I was 90% ready to sign up with him.

THEN, I did a search of his company name in www.yelp.com and found that someone with his name (same first name, which is a rare name, and initial of his last name) had posted a raving review of his company pretending to be a customer. That totally creep-ed me out. Now I'm wondering why would someone whose company has a great record and long list of references need to do that? It's possible that he didn't post it, but if someone wanted to mess with him, like a pissed off customer, wouldn't they just post a bad review?

I was so ready and excited to go with him but now I got a question in my mind which I don't think I can ask him about. This really sucks.

[Skydawggy]

Are you interested in hiring a Saint or a good window installation company? For crying out loud. The guy has answered all your questions, been forthcoming with information and references and now you are creeped out because he "might" have posted something about his company. Sheeesh.... give the guy a break.

.

[Guy]

Once you hire a Licensed Contractor to do your work, your safe in most states. If the company you hire is licensed in your state the burden becomes theirs. If you hire someone non-licensed the rules change because they really become your employee. The WC laws were made to protect employees on the job. It's been pushed by attorneys seeking compensation, into home owner responsibility. Just like everything else we do. The blame always seems to go against those who really did nothing or were acting in good faith.

Unless the people performing the work are your employees, you should be safe. Owners and occupants of residential real property who contract out work done to that property are not responsible for obtaining workers’ compensation insurance for those workers, or for making sure the workers are covered. However, if the workers are your employees, you are required to maintain workers’ compensation insurance for them.

Every state is a bit different as stated above. I'd recommend calling your state Workers Comp info line and checking up on your local laws to be safe.

[Bill]

The best advise is to check with your state because the laws do vary. Here in New Jersey workers comp is not required to obtain a home improvement contractors license, only liability is. If a home owner hires a licenced contractor here and they do not have the policy the home owner is on the hook.

Bill

[kehlar]

Are you interested in hiring a Saint or a good window installation company? For crying out loud. The guy has answered all your questions, been forthcoming with information and references and now you are creeped out because he "might" have posted something about his company. Sheeesh.... give the guy a break.

.

I can appreciate your response. It's just that as a new home owner who's never worked with contractors and who's heard so many horror stories, I can't help but be very cautious and concerned about every detail. The work I'm getting done is pretty expensive (~20,000), so that's another reason that I want to make sure everything is checked out.

I ended up calling two references on his list, both gave him rave reviews. I've also requested a copy of their worker's comp. I'm going to drop off the contract this afternoon. I figure that if he had indeed post a review on yelp pretending to be a satisfied customer, it's probably to get some visibility for his company since no one has posted a review for him (a lot of people use yelp to choose vendors). I still think it is a bit shady and shows questionable honesty, but without the ability to confirm this I'm gonna let it slide based on the good references that I've heard.

Thanks to all who had provided useful information. I really appreciate this board.

[Door&WindowPlus]

In California there are alot of companies that do not have workers compensation. It is my experience that most people think that every company is required to have workers compensation and don't take the time to do their own research. Companies tell the state they dont have employees and so they are not required to have workers compensation. The company then subcontracts the work out and those workers dont have any insurance that homeowner is liable. Seems unfair but all you have to do is look the contractor up and see if they have insurance or not. Always contact the state contrators board and see a copy of the policy and verify by calling the insurance agent listed on the policy. If you cant verify the insure could be non-existent and your liable. Saving a few hundred bucks could cost you alot more in lawyers fees. Do Your Homework!!!

P.S. Most salesman are 100% commission and don't always tell the truth.

From the California Contractors Board website.
Verify the contractor's workers' compensation and commercial general liability insurance coverage.
Ask to see a copy of the certificate of insurance, or ask for the name of the contractor's insurance carrier and agency to verify that the contractor has the insurance.

In California, if a contractor has employees, they're required to carry workers' compensation insurance. The importance of this cannot be overstated. If a worker is injured working on your property and the contractor doesn't have insurance, you(homeowner) could be liable to pay for injuries and rehabilitation. Your homeowner's insurance may or may not cover those costs.

[chevyman]

I personally would never buy windows from a "middleman" type company that doesn't have there own installers or service men because that tells me that they are buying the windows from anther company and having them installed by another sub or another installing company.
So if there is any warranty work that needs to be done you have to figure out who is going to fix the windows for you.
then you also have to worry is the company you bought the windows from still in business?

Just my thoughts.

[Windowman]

Not all true, They can have an account with a window manufacturer, but as with alot of companys in CA. they use subs so they dont have to worry and workmans comp.
The contractor you sign with has to give you the warranty, they require the subs to warranty their own work for at least 1 year.
It is a gray area in CA. if they use the sub for full time installs they really are employees. but thats a long story

I personally would never buy windows from a "middleman" type company that doesn't have there own installers or service men because that tells me that they are buying the windows from anther company and having them installed by another sub or another installing company.
So if there is any warranty work that needs to be done you have to figure out who is going to fix the windows for you.
then you also have to worry is the company you bought the windows from still in business?

Just my thoughts.