Hiring an unregistered contractor for a gut renovation: who pays if a worker gets hurt

The buyers described the man as a landlord who does a lot of renovation work. He told them his construction insurance would take care of it if someone got hurt. Builder's risk, the usual policy for a building under construction, does not. The Hartford describes it as cover for the building, materials and equipment while work is under way and says it does not protect workers on the site. General liability pays when a third party is hurt or their property is damaged, and the insurer notes that a contractor's GL policy excludes bodily injury to the contractor's own employees. Workers' compensation fills that gap.

If the person you hire carries no comp, the bill can come to you. California's Contractors State License Board says an owner-builder who brings in workers who aren't licensed subcontractors may be treated as an employer, with duties that include workers' compensation, payroll tax withholding and unemployment contributions. The board also warns that owners whose unlicensed or uninsured workers get hurt may be asked to pay through their homeowner's policy or face a lawsuit. Washington's Department of Labor & Industries says contractors without registration have no bond or insurance protecting the customer.

Permits work the same way. Under CSLB guidance, signing the permit application as owner-builder makes you responsible for the whole project: pulling permits, passing inspections and paying suppliers and subcontractors, who can file mechanics liens if they go unpaid. Licensing and registration rules differ by state, so the state where the house sits sets the terms.

Before any work starts, ask for certificates of insurance that name workers' comp and general liability with dates covering the job, and look up the contractor's registration with the state. Washington lets owners check both registration and comp coverage online.