Is it uncommon for GCs to be insured and carry workers comp?

Question

Hello community,

I'm working on rehabbing my first rental property!  Wohoo!  But I have been running into a bit of a wall. I've started to contact a few GCs for them to come bid my property, but when I ask them to provide me with proof of license, insurance and workers comp, I get ghosted. Is it uncommon for them to carry those things?

I'm in the Rowlett, TX area. Anyone can help how I should approach the conversations so I'm not scaring them off?

Thank you!

Kyle Mccaw · Answer

@Isaac C. work of g.c. referals and you should be fine. They may be ghosting you because of multiple reasons. The biggest of which is there is soo much demand right now they don't need to bother with your requests. They have 20 more potential clients calling them at the same time as you.

I see lots of inaccurate information in the responses to your question. To help clear up of your questions.

-Texas does not have a g.c. license.

-Insurance is important. Most low end contractors don't have it. It is cheap for them to get.

-Workman's comp is for employers. A g.c. is going to hire subs. So w.c. does not apply to them.

Bruce Woodruff · Answer

As @Matt M. said, if you have your own employees, you must have Workers Comp. A one man GC operation does not need WC, nor if they employee family members. Every Contractor must have a State License and a Bond.

They should show you all of these upon request at time of proposal submit. If they don't then just move on because they are lowlife scammers or just Contractors that don't know how to run a business...neither of which you want to do business with.

Take as long as you need to to find the right GC, because with the right guy you will smile all the way through the project, and with the wrong guy, you will end up in court, miserable and broke.....

Ronald Rohde · Answer

There's a lot of correct information, BUT for different states. GCs are regulated at the state level.

Kyle is correct, Texas does not require a license to be a general contractor. Only Plumbers, electricians, etc are licensed.

Its common not to have Worker's Comp insurance in Texas, not required. I'd primarily be looking for length of operations, lawsuits, bonded amount. That plus a good written agreement, unconditional waivers upon progress payments, 10% retainage, etc.

Vin Somra · Answer

@Isaac C.

As some others have noted the Workers Comp is required if the GC has employees on payroll. Typically, Contractors will have their subs as 1099s and they will exempt themselves from workers comp claims by signing a waiver form. This helps them save $$

Electrical and Plumbing Contractors need to be insured and licensed but it’s not required for say a carpenter. I would highly recommend you get a certificate of insurance with yourself or your entity which owns the property listed as an additional insured on the contractors policy to protect yourself from any liability which may arise on a larger project. Make sure the contractor has workers comp or waivers for his/her subs and the owner so they can’t come after you if someone is injured on the jobsite.

Rick Pozos · Answer

Find out from the city what is required from a contractor. 100% sure that the a/c, electrical and plumbing people will need their own license. It depends what you are having done to the house as to what license the contractor will need. Every city is different.

Sometimes handy people will try to act as if they are contractors. There is the price difference also. If you are looking for a contractor, hire a contractor, not a handyman. They should have insurance and a license if the city requires one.

Michael Voils · Answer

Unless you are acting as the general contractor for the project, you shouldn't have to worry about any contractor injuries while the project is underway. I'm not a lawyer, but it was always my understanding that once the GC took over, it's their job until they are done. Any claims or injuries would be made against the employer, not the home owner. The employee can sue the subcontractor they work for, which is actually what workman's comp is. It's an insurance that the employer pays in to to protect themselves from being sued. Workman's comp provides care and compensation in response to any claims and injuries, requiring proof and reports of the incident. The employer may choose (in Texas) to take that risk of the possibility of being sued by his employees. Being "bonded" is a different story entirely. That protects you from the contractors messing something up and costing you money. The GC has to be bonded to cover themselves for this. If they do something that damages or destroys your home, their bond will pay for it. It's an insurance.

TLDR; Not a lawyer, but it should be the contractor's problem to worry about employee injuries on the jobsite.

Isaac C. · Answer

@Matt M. Hi Matt! I haven't thought of it that way, it definitely makes business sense.  I will stop hounding them for workers comp haha!  Just remember a bp podcast about workers comp.  Keep hearing it in my head haha

Isaac C. · Answer

@Colleen Cupp Hi Colleen!  Nice to meet you!

Isaac C. · Answer

@Bruce Woodruff hi Bruce!  Thank you for your advice!  You are correct, I will spend more time carefully vetting for this first rental property, as it should serve me well for the future ones.

Is it uncommon for GCs to be insured and carry workers comp?

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