The Importance of Hiring a Licensed, Bonded, and Insured Contractor for Listing Repairs

March 19, 2024
8:00 am

When assisting your sellers in preparing their home for sale, making necessary repairs and improvements is often a key step in attracting buyers and getting the best price. However, hiring the right contractor is crucial to ensure the work is done correctly and protected from potential liabilities. Consumer advocates recommend hiring repair and remodeling contractors who are “licensed, bonded, and insured.” But what do these terms mean, and why are they important?

Licensing: State laws often require contractors to be licensed, especially for specialized trades like electricians and plumbers. Licensing ensures that the contractor has met competency standards in their industry, assuring that the work will be done professionally and up to code.

Bonding: Contractors purchase bonding as a form of insurance that protects consumers from deficiencies, negligence, or failures to complete the work. There are different types of bonds, including surety bonds, which ensure that the contractor completes the contracted work and follows laws and regulations, and fidelity bonds, which protect against fraud.

Insurance: Hiring an insured contractor is essential for protecting the homeowner and the contractor from potential liabilities. If a contractor’s employee is injured while working on the property, the contractor’s insurance will cover their care, preventing the homeowner from having to file a claim with their insurance policy. Additionally, if a contractor’s equipment or tools are damaged or stolen, their insurance will cover the cost.

Hiring licensed, bonded, and insured contractors ensures protection in the event of any unforeseen issues or accidents during the repair process. It also provides peace of mind, knowing that the work will be completed to a professional standard.

How to Hire the Right Contractor

When hiring a contractor for your listing, getting referrals from trusted sources and obtaining bids from at least three contractors is important. Ask for copies of their licenses, bonds, and insurance to verify that they are up to date and cover the scope of the work.

Hiring a licensed, bonded, and insured contractor is essential when repairing or improving a home before putting it on the market. Not only does it protect the seller from potential liabilities, but it also ensures that the work is done professionally and up to code.

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