What Is The Difference Between a Licensed and an Unlicensed Contractor?

Home improvement season is upon us!  Many people are busy planning out which home projects they want to complete first, so they can turn their dream home into a reality.

Getting the help of professionals may be necessary if you are looking to make an improvement that is outside of your skillset, or that you simply do not have the time to complete.  Perhaps you have ventured onto Google to search for something like “general contractors near me” and you’re seeing an endless list of results.  How do you go about choosing the right contractor for the job?

One of the most important things you need to think about is whether or not you are about to choose a licensed general contractor.  Using a licensed contractor versus an unlicensed contractor may make a bigger difference than you think and we’ll explain why.

What does it actually mean to be a licensed contractor?

To become a licensed contractor, one must meet certain criteria and maintain standards that qualify them as a professional in their field.  This is usually a very costly and ongoing endeavor, but in most cases is a sign of the contractor’s commitment to showing their customers that they are a skilled, knowledgeable, and responsible contractor.  In some cases, this may mean that you are generally going to see higher prices from a licensed contractor than an unlicensed contractor.

There are some key factors you need to take into consideration:

If you use an unlicensed contractor, there is a good chance they do not have liability insurance.  If that is the case, you, as the homeowner, are now financially responsible for any and all damage that occurs to your home.  Many unlicensed contractors also do not have workers’ compensation insurance.  This would mean that you could be held responsible if a contractor injures themselves or dies while working on your home.  If the contractor you hire is not properly insured, a court would most likely decide that you should be responsible for any legal or financial liability claims.

Most unlicensed contractors are not bonded either.  When a contractor is bonded, it means they are paying a fee to a bonding company that helps to protect the consumer.  The bond is almost like an insurance policy, which helps to motivate the contractor to complete the work they have been hired to do.  Any money that the homeowner would need to pay to a contractor would be held by a bonding company.  Should a contractor fail to complete their work as specified in their agreement with the homeowner, the bonding company would redistribute money to the homeowner to compensate them.  For example, if a contractor is hired to install a new light fixture, but it then falls out of the ceiling and damages the drywall, the money from a bond would help cover the cost of repairing that damage.

Lastly, an unlicensed contractor may provide a quality of work that is subpar.  While it is possible that a licensed contractor could also do a job that is not up to your standards, the risk that you will not be happy with the outcome of a job is much higher with an unlicensed contractor.  General contractors who are licensed normally have a reputation that they want to protect and want to gain your trust as a consumer.  Part of building that trust is maintaining their status as licensed contractors.

Harbor Stone Construction Company is a licensed contractor and is committed to providing quality craftsmanship with unrivaled customer service.  The next time you Google “general contractors near me”, look for Harbor Stone Construction Company.  We provide a wide range of services and would be more than happy to provide you with a quote for your next home project.